PAYMENTS
The payment problem Is more legislation helping or hampering the payment sector of the construction industry?
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n the construction industry, delayed payments have a widespread knock-on effect. Beyond impacting an individual business, its employees or customers, the consequences of legislation tend to be on show throughout the whole economy. With changes and strengthening to the muchmaligned Prompt Payment Code having taken into effect in July 2021, are we finally seeing an end to poor payment practices, or is more regulation needed?
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Why are payment delays an issue? The construction sector is one of the most prominent players in the global economy, employing millions and contributing even more financially. With high demands, swift turnarounds and tight schedules to meet, the industry can be a melting pot of tension, nerves and pressure. So, when late or missing payments get factored in, problems may not be far away. Whilst many consider late or delayed payments as part and
parcel of the sector, they can prove incredibly problematic. The most notable effect of late payments is that they have the potential to delay - or derail - an entire project. However, it can go beyond that too. Relationships can get strained, reputations may deteriorate, and credibility can dwindle. All of these are the best-case scenarios too. Too many late payments can force businesses to shut their doors for good - as shown in the prominent Carillion collapse of 2018.
