A recent BBC Radio 4 documentary on payment practices in the construction industry highlighted the abuses which apply in the construction industry on a day-to-day basis. The programme was not a typical subject for the File on 4 series, but turned out to be just as hard-hitting as many of its award-winning episodes.
As well as showing the passion and commitment of those in the supply chain, the programme also exposed some difficult home truths. It showed how some of the biggest construction companies often use the supply chain as a financial crutch, even structuring business models to this end.
As the fallout from Carillion continues, accounts of late payment will undoubtedly raise further questions throughout the supply chain – and more widely – about main contractor business models.
There have been numerous examples of how Carillion consistently extended its loan repayment terms by borrowing money against its subcontractors through initiatives such as the early payment facility.
You can listen to the File on 4 programme here.