Amendment to Reporting on Payment Practices and Performance Regulations approved
Following consistent advocacy by ECA, the amendment to Reporting on Payment Practices and Performance Regulations has been approved, representing a long-awaited win for ECA Members and the wider construction industry.
For more information about payment practices see articles The Reporting on Payment Practices and Performance (Amendment) (No. 2) Regulations 2024, Fair payment practices for construction and Progress on poor payment practices.
This amendment will enhance transparency in retention procedures with qualifying businesses obligated to publicly disclose details on their payment practices. From 1 March 2025, when the changes come into effect, large businesses will be required to report the following metrics:
- the percentage ratio of the amount of retention that is withheld from the company by its clients, which the company holds back from its suppliers.
- the percentage ratio of the amount of retention that the company withheld from the total value of payments made to suppliers as a proportion of the amount paid to suppliers during the reporting period.
This overdue reform addresses a critical issue in the construction sector: late payments, which disproportionately affect small businesses with limited financial reserves. These metrics will directly benefit small and medium enterprises by providing better information about a company’s retention payment practices.
This increased transparency is expected to incentivise large businesses to adopt fairer payment practices.
Rob Driscoll, ECA Director of Legal and Business said:
“Both the Commons and the Lords approved another significant milestone in the fight for fairer payment on behalf of ECA Members. At first, making large firms to report on their retentions may not seem much, but it will expose the size and nature of the problem of retentions abuse, allowing use to pave the way for an industry and Government agreed solution.
“We’ve been working towards these steps for a long time, which includes liaising with ECA’s equivalent in Australia and New Zealand for inspiration to motivate reform in the UK.”
To learn more about ECA’s work toward creating a fairer business landscape, visit this page. ECA’s Business Policy & Practice team has produced guidance and templates to support Members with payment practices and offers a free Member Helpline to answer your queries, find out more here.
This article appears on the ECA news and blogsite as 'Landmark amendment to Payment Practices approved' dated 26 January, 2025.
--ECA
[edit] Related articles on Designing Buildings
- Cash flow.
- Causes of construction disputes.
- Collaborative practices.
- Construction client's charter.
- Construction supply chain payment charter.
- ECA articles.
- Fair payment code.
- Fair payment practices.
- Fair payment practices for construction
- Housing Grants, Construction and Regeneration Act.
- Insolvency.
- Net zero commitment will be required for major government contracts.
- Procurement policy note PPN.
- Prompt Payment Code boosted to help SMEs.
- Prompt payment code: the story behind the headlines.
- Progress on poor payment practices.
- Project bank accounts.
- Remedies for late payment.
- Scheme for construction contracts.
- The Late Payment of Commercial Debts Regulations 2013.
- The Reporting on Payment Practices and Performance (Amendment) (No. 2) Regulations 2024
Featured articles and news
Amendment to the GB Energy Bill welcomed by ECA
Move prevents nationally-owned energy company from investing in solar panels produced by modern slavery.
Gregor Harvie argues that AI is state-sanctioned theft of IP.
Heat pumps, vehicle chargers and heating appliances must be sold with smart functionality.
Experimental AI housing target help for councils
Experimental AI could help councils meet housing targets by digitising records.
New-style degrees set for reformed ARB accreditation
Following the ARB Tomorrow's Architects competency outcomes for Architects.
BSRIA Occupant Wellbeing survey BOW
Occupant satisfaction and wellbeing tool inc. physical environment, indoor facilities, functionality and accessibility.
Preserving, waterproofing and decorating buildings.
Many resources for visitors aswell as new features for members.
Using technology to empower communities
The Community data platform; capturing the DNA of a place and fostering participation, for better design.
Heat pump and wind turbine sound calculations for PDRs
MCS publish updated sound calculation standards for permitted development installations.
Homes England creates largest housing-led site in the North
Successful, 34 hectare land acquisition with the residential allocation now completed.
Scottish apprenticeship training proposals
General support although better accountability and transparency is sought.
The history of building regulations
A story of belated action in response to crisis.
Moisture, fire safety and emerging trends in living walls
How wet is your wall?
Current policy explained and newly published consultation by the UK and Welsh Governments.
British architecture 1919–39. Book review.
Conservation of listed prefabs in Moseley.
Energy industry calls for urgent reform.