Minister launches consultation on improving payment practices in the construction industry

Finance Minister, Nigel Dodds today launched a consultation on proposals to improve payment practices in the construction industry.

The consultation paper, Improving Payment Practices in the Construction Industry in Northern Ireland, seeks views on amending the Construction Contracts (Northern Ireland) Order 1997 and associated legislation; the effect of the proposed measures in respect of equality issues and on the anticipated regulatory impact.

Confirming the Executive’s continuing commitment to alleviate pressures on the construction industry at this challenging time, Mr Dodds said: “The construction industry is one of the largest industries in Northern Ireland and plays a vital role in the economy. Given its importance, it is essential that we have fair payments in place. While the introduction of the Construction Contracts (Northern Ireland) Order some ten years ago did bring significant benefits, it has since become apparent that we now require further improvements”.

The measures proposed are intended to:

• Encourage parties to resolve disputes by adjudication;
• Improve transparency and clarity in the exchange of information relating to payments, thereby enabling parties to construction contracts to manage cash flow better; and
• Improve the right to suspend performance under the contract.

The Minister continued, “I believe that guidance must remain our preferred option to improve the operation of construction contracts and have considered further legislative intervention only where it is absolutely necessary.

“The proposals will create a better defined and more effective regulatory infrastructure and so help maintain a fine balance across the range of interests represented within the industry”.

The proposed changes are also intended to keep pace with proposed amendments to the Construction Act currently being developed in Great Britain to maintain parity of legislation and commercial opportunity.

The Minister concluded: “The amendments I am proposing will benefit all participants in the industry and I look forward to this consultation generating a healthy discussion with a constructive response.”

The consultation paper and response form is available to download at the Department for Finance and Personnel website

Alternatively, you can obtain a copy on request by letter or fax to:

Department of Finance and Personnel
Central Procurement Directorate
Construction Initiatives Branch
Clare House
303 Airport Road West
Belfast
BT3 9ED

Fax: 028 9081 6555 or, by email to: consult.constructorder@dfpni.gov.uk

Notes to Editors:

1. The format of the consultation follows closely on the content of the earlier consultation in Great Britain carried out by the Department for Business, Enterprise and Regulatory Reform (BERR) and the Scottish Government.
2. In Great Britain, BERR’s proposed amending legislation, on which our proposals are based, is set out as Part 8 of the Local Democracy, Economic Development and Construction Bill currently before Parliament. This Communities and Local Government Bill was introduced in the House of Lords on 4 December 2008 and has just completed its Committee Stage.
3. Media enquiries to DFP Communications Office on 028 9052 7374 or 028 9052 7375. Out of office hours please contact the Duty Press Officer via pager number 076 9971 5440 and your call will be returned.