Government consults on improving payment practices

DTI construction minister Nigel Griffiths and Edwina Hart, the Welsh Assembly Government minister for Social Justice & Regeneration, have launched a joint consultation on improving payment practices in the construction industry. It proposes a number of amendments to Part II of the Housing Grants Construction & Regeneration Act 1996 and the Scheme for Construction Contracts (England and Wales) Regulations 1998. It considers issues and proposals identified during Sir Michael Latham’s initial review of the Construction Act published in September 2004. The proposals cover three main areas. Reaching agreement on what should be paid and when, given the work done under the contract. Where agreement cannot be reached, to make an informed referral to, or response at, adjudication. Manage cash flow and enable completion of work on the project in the event of problems such as defaulted payments, disputes or insolvencies elsewhere in the supply chain. Refer disputes to adjudication without disincentives such as avoidance, frustration or unnecessary challenge. The consultation period ends on 21 June. Nigel Griffiths comments, ‘Fair payment practice is something everyone agrees with, and a fair-payment culture underpins any progressive and modern industry. ‘This consultation considers a number of issues around the key principles of improving the ability of people in the construction industry to manage cash flow on projects and to bring about effective delivery, on time and to budget.’