Lord Mandelson fails to deliver Government's 10-day payment pledge

Government departments are failing to honour business secretary Lord Mandelson’s pledge to pay contractors within 10 days, according to a new industry survey.

Around nine out of 10 specialist heating and ventilating contractors working for public clients said the Government had failed to live up to its own payment guidelines, designed to ease contractors' cash flow problems.

Now the Heating and Ventilating Contractors Association, which carried out the survey, is calling on construction and business minister Ian Pearson to publish official payment statistics.

Last October business and enterprise secretary Lord Mandelson pledged that central Government would pay its suppliers within ten days at the very latest.

But surveys carried out among HVCA members in the last quarter of 2008 and the first quarter of 2009 revealed that public sector clients are coming nowhere near to settling their invoices within Lord Mandelson’s deadline.

Of the contractors that responded to the survey, only 12% of those who dealt directly with public sector clients received payment within 10 days, 39% had to wait at least 30 days and 8% more than 60 days.

Sub-contractors on public sector projects fared slightly less well – with only 10% receiving payment within 10 days, 63% having to wait at least 30 days and 10% waiting more than 60 days.

The surveys attracted 154 responses from heating and ventilating contractors and provided some evidence that main contractors are mostly passing on payments to subcontractors when they are paid more quickly themselves.

 Martin Burton, HVCA vice president and chairman of its commercial and contractual committee, said: “Our findings – which are backed up by consistent anecdotal evidence – strongly suggest that Lord Mandelson’s edict has had very little effect so far on payment performance in our sector.

 “The secretary of state’s message is simply not being heard at local level.”