Construction Supply Chain Payment Charter

A Construction Supply Chain Payment Charter that sets out payment terms of 30 days has been agreed by the Construction Leadership Council (CLC), the body set up to deliver the government’s industrial strategy for construction.

The charter sets out 11 “fair payment commitments”. These include a commitment to reduce payment terms to a supply chain to 30 days from January 2018. The charter also sets out stages before this: terms of 45 days from June 2015, and 60 days with immediate effect.

Other commitments made in the charter include not withholding cash retentions, not delaying or withholding payment, and making payments electronically.

Any organisation that becomes a signatory to the charter agrees to apply the fair payment commitments in its dealings with its supply chain; to be monitored for the purposes of compliance by reporting against a set of agreed key performance indicators (KPIs); and to consider the performance of its supply chain against those KPIs when awarding contracts.