Late payments is the top issue stifling the growth of the construction industry and its SMEs, according to a survey by UK invoice finance provider Bibby Financial Services and consultancy firm The Vinden Partnership.
The survey, conducted among 200 SMEs last October, found that more than half (53%) of SMEs cited late payments as a key challenge , followed by skills shortages (47%) and rising levels of red tape (39%).
Helen Wheeler, managing director of construction finance at BFS, said the issue of late payment threatens the survival of many viable companies in the UK.
"Issues associated with late payment continue to hinder the growth of thousands of small construction businesses every year, despite government efforts to improve the situation. This has a huge impact throughout the entire supply-chain and will undoubtedly affect the performance of the construction sector this year," Wheeler said.
According to the Planning for Growth report which included the survey, government measures – including the Prompt Payment Code introduced in 2008 and the Construction Supply Chain Payment Charter announced last April – are failing to help SMEs with this issue.
Mal Bannatyne of Bannatyne Construction in North London said: "Late payment is a big issue in the construction industry and too often, payment delayed by weeks, which can be extremely problematic. The Prompt Payment Code hasn’t helped as most businesses don’t take much notice of it."