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Confederation Comment - Farmer Review: Unfair Payment Practices




Farmer Review - Recognises Unfair Payment Practices for Specialist Contractors!

Published 17 October 2016

The well-received Farmer Review of the UK Construction Labour Model, has identified many unjust payment practices that specialist contractors are unfairly subjected to and must contend with whilst contracting as part of a supply chain:

  • "...multiple on-costing, downward and often inappropriate risk transfer" (p.17)
  • "...Clients tend to fixate on lowest initial tendered price and this is often perpetuated by their advisors, who, in a traditional procurement model, are implicitly employed (at least partly) to manage a fixed and adversarial transactional interface between clients and industry" (p.24)
  • "...The multiple and tiered sub-contracting interfaces within the industry and between industry and its clients has generated a further non-value add process whereby some businesses higher up the supply chain will use other businesses’ money lower down to temporarily support and enhance their own cash flow." (p. 24). I guess this may be the answer to why the Robertson Group are predicting the rebalancing of margins if project bank accounts become commonplace:

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