A Year On And The Payment Situation Is Now Even Worse!
A year ago our first ‘State of the Industry’ survey revealed that a staggering 90% of Specialist Contractors were being subjected to unfair treatment or sharp practice, and regrettably our latest survey show the situation has got even worse!
Our 2013 payment survey has revealed that one year on, Specialist Contractors are still being subjected to wholesale payment abuse.
Even on publicly funded projects less than 4% are being paid within 30 days, some 20% were not paid until 60 to 90 days, and almost 7% said they had been paid later than 90 days. The private sector was broadly similar with only 6% getting paid in 30 days and some 25% getting paid in excess of 60 days.
So, why aren’t Specialist Contractors standing up for themselves and saying enough is enough?
Work is still in short supply and despite the enormous risks many Subbies said that they felt forced to take the work for fear of not getting future work. Results show that 73% of Specialist Contractors on both public and private sector jobs felt unable to challenge the ridiculous payment terms they were offered, even those that escalated to more than 120 days!
When challenged on payment terms, Contractors are quoted as saying ‘take it or leave it’ and that there are ‘many more are waiting in line for this work and they will accept our terms’.
Who Will Help The Beleaguered Specialist Contractors?
Not the Government that’s for sure! Despite their supposed ‘help’ for small businesses, they are actually part of the problem!
Less than 4% of our respondents said they got paid within 30 days when working on public sector contracts, and more worryingly 20% got paid with 60 to 90 days and almost 7% got paid in excess of 90 days!
Not only are the Government not enforcing their 30 day payment terms, they are ignoring the fact that the current late and non payment remedies are fit for purpose and don’t actually work.
The Prompt Payment Code is one big joke, as most companies who signed up, choose to ignore it, and when asked about it on BBC Radio5Live’s investigation into late payment, Michael Fallon admitted that ‘the code is not binding and companies can simply choose not to comply.’
Forgive me for stating the b***ding obvious Mr Fallon but that’s not terribly helpful!
Our survey also found that the “Mystery Shopper” service and the Late Payment legislation has proven to be another useless tool in the fight against late payment, with just 13% actually being aware of its existence, and those that had tried it said it was next to useless as it ‘has no teeth’.
Our survey also revealed a general consensus that reverse factoring payment schemes that require Specialist Contractors to PAY to get PAID are as Construction Enquirer said recently a “fundamentally flawed and morally bankrupt approach” to payment , and are just another way for the Contractors to legally abuse the payment system.
How Far Have We Come – What More Can You Do?
Despite the fact that the late payment situation over the last year, has worsened our campaign against it has gathered momentum.
The StreetwiseSubbie Fair Treatment Charter was proposed by an all Party Inquiry as part of the fight against late payment, and I took part in a two part investigation on BBC Radio5Live, which resulted in their biggest response ever.
We don’t think that David Cameron’s press release the next day was a coincidence, and it prompted me to suggest that “pigs might fly”, because as far I’m concerned it was just another empty political BS statement.
So, What Can YOU Do?
We all need to keep pushing on in order to make even more impact on the situation
We have to get more media coverage for the issue, and maybe we need to take a leaf out of Unite’s book and adopt their “leverage” approach.
Unite leader Len McCluskey is adamant that such tactics are here to stay and says that;
“Leverage is about telling the bad bosses that they have nowhere to hide, challenging their conduct with shareholders, with clients and customers.”
Maybe you might think that picketing the big Contractors is a step too far, but there are lots of things that you can do without even leaving the comfort of your office.
If everyone takes just a couple of minutes to do their bit, we are confident that we can take even larger strides in the next year (and the run up to the election) in our fight against late payment.
So what can you do?
- Sign the petition ‘Stop Funding the Corporate Thieves’ (click here)
- Download a copy of the Streetwise Subbie Fair Treatment Charter (click here) and ask all your suppliers, the Contractors you work with and even your competition to adopt the Charter in every contract.
- Get in touch with the BBC (click here) and share your late and non payment experiences.
- Send a letter to Vince Cable, Michael Fallon and your local MP (click here to download templates).
- Join our exclusive LinkedIn group (click here) of over 1,480 Specialist Contractors and contribute to the debate on new ways to fight late payment together
- Follow us on Twitter, @StreetwiseSubbi, and use the #buildfair4all to tweet your support
- Give me a call and let’s see what else we can do together