New fair payment rules will boost construction SMEs

The Government’s new fair payment rules will make a real difference to construction SMEs by helping finance flow down through the supply chain, according to the Federation of Master Builders (FMB).

Brian Berry, Chief Executive of the FMB, said:

“The Government’s new approach to ensuring 30-day payment becomes a reality throughout the supply chain on public sector contracts is a particular bright spot within the plethora of recent announcements on support for small business. The FMB has been calling on central and local government to mandate fair payment throughout the supply chain for some time, and it’s highly encouraging to see that Ministers are listening.

“Most small construction firms would be financially ruined if they had to wait as long as 120 days for payment, which is why many do not even attempt to form part of the supply chain for public-sector contracts. This has been one of the major barriers to increasing engagement by SMEs in public procurement, so it’s great news that assertive action has now been taken.

“The FMB is also working closely with government on a new Fair Payment Charter, which will contain even more measures to help speed up the flow of finance and ensure all parts of the supply chain can benefit from the public sector as a responsible client.

“Overall it’s very positive that the Government is prioritising support for small businesses and not just paying lip service to their plight. We hope this can help sustain a strong recovery in the SME construction sector into 2014 and beyond.”