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Government to look into late payment - again

THE GOVERNMENT is to set up special working party to look at long running complaints from construction subcontractors over late payment.

The move came after Brown's Budget announcement that the government would 'sector by sector tackle unneccesary regulation starting with chemical, construction and retail'.

The Housing Grants, Construction & Regeneration Act of 1996 was supposed to end past practice of 'paywhen-paid' clauses. Under these, subcontractors would only receive money after payment had been made further up the supply chain.

'But the provisions remain if the main purchaser suffers insolvency, ' said a spokesman at the British Constructional Steel Association, one of several bodies which has campaigned to change the law.

'It is the only law which not only tolerates but actually sanctions non-payment even when a supplier has properly fulfilled his obligations.'

Pay-when-certified clauses have also crept into contracts and, smaller suppliers say, are the old system by another name.

A Department of Trade & Industry (DTI) spokesman said the membership and scope of the review had not been decided although there were plans to consult industry bodies.

Arbitration clauses forcing the complainant to pay for adjudication may also be reviewed.

The DTI is to set up a cross government and industry committee to look at excessive or duplicated regulation in construction.

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