Late payment has long been an issue in the construction
industry, affecting not only smaller businesses and those lower
down the supply chain. The 2008 financial crisis exacerbated what
was already an existing problem for suppliers. The introduction of
the contractual payment provisions in the Housing Grants,
Construction and Regeneration Act 1996 (HGCRA) in the mid
1990's, almost 25 years ago, sought to address, amongst other
things, delayed payment, unreasonable payment terms and payment
contingent on other events, including pay when paid clauses.
The HGCRA, shored up by amendments to the payment provisions in
2011 and the Prompt Payment Code (the Code), are still in place
today. The Code was set up in 2008 by the Chartered Institute of
Credit Management on behalf of Government as a voluntary measure to
discourage late payment in the UK business culture. However, more
is needed to improve late payment practices.
