Publication by the Office of Government Commerce (OGC) of The Fair Payment Guide and Charter
Introduction
Readers may be interested to know that on 1 January 2008, the Office of Government Commerce published a "Fair Payment" Guide and Charter with the aim of encouraging fair payment practice in the construction industry which historically suffers from large losses of money and diminution of productivity as a result of confrontation between parties.
The Fair Payment Charter has been endorsed by the government and signed by the OGC, the Local Government Taskforce, the Construction Industry Council, the Construction Federation and the National Specialist Contractors Council.
The Fair Payment Charter seeks to commit clients, lead contractors and their supply chains to, amongst other things:-
- Greater transparency;
- No unfair withholding of retentions;
- More efficient payment procedures; and
- Payment periods not exceeding 30 days.
Central government construction clients are expected to follow the Payment Guide and Charter as from 01 January 2008.
It is estimated by the OGC that widespread adoption of the principles of the Guide and the Charter could save the public sector up to £750m.
A press release from the OGC states that it plans to monitor the progress of the implementation of the Charter and the recommendations, together with the savings made as a result of the Charter during the next two years.
Further information can be obtained from the OGC website http://www.ogc.gov.uk/.
It will be interesting to see the extent to which the Guide and Charter are adopted and, more importantly, followed.
