The government has refused to say whether any construction firms have ever been banned from winning contracts because of their poor payment performance.

In June, the Cabinet Office announced a consultation on extending the sanction to a potential ban on bids on all public sector work.

Construction News used the Freedom of Information Act to ask how many companies had been banned as a result of the payment rules since 2019. CN asked for a breakdown by year, including names of companies and their sector.

The request was refused, with the Cabinet Office citing commercial confidentiality even though the government could have chosen to say how many businesses had been banned and in which sector, without naming them.

The department only provided a statistic stating that 4 per cent of all bidders on central government contracts had failed to win a contract due to their payment performance since January 2024. This related to 97 contracts, frameworks and dynamic purchasing systems/dynamic markets with an estimated combined value of �74.7bn, it stated.

At least five Whitehall announcements have been issued since 2018 about measures to ban companies with poor payment records from public sector work (see box below).

Since 2019 , the rules have meant that persistent late payers could be banned from bidding on central government contracts.

Barrister Rudi Klein told CN he did not believe any construction company had ever been banned, suggesting that such information would have leaked out.

He said he was not surprised at the decision not to name companies that had failed to win contracts under the rules, for fear of running into legal issues, but added that withholding their sectors was unhelpful.

If they were prepared to say, Weve decided to exclude one major company in the construction industry from bidding on this job, that would send a very good message to the rest of the industry that, actually, they are doing something, Klein said.

If they really want to have some impact, thats the kind of thing they should be doing.

The extent to which they seem to be hiding this doesnt help.

Rob Driscoll, director of legal and business at the Electrical Contractors Association, said the statistic cited by the government showed steps in the right direction, but raised more questions such as which sectors were the worst-performing and the total number of bidders across the affected contracts.

Driscoll, who previously sat on a board providing advice to the Cabinet Office on payment issues, added: Realistically, do we want those that fail the payment-performance requirements banned or rejected, such that they can regroup, improve and requalify for the next opportunity? Isnt that the purpose of the policy, ie, to leverage the public purse to pull payment behaviour in the right direction?

A government spokesperson said: We are committed to tackling suppliers who dont pay businesses on time.

Under this ban, the time taken to pay invoices by the largest government contractors has significantly decreased, with an average improvement of around 10 days that has helped unlock millions of pounds for small businesses.

We will be further strengthening this measure in October to drive additional cashflow to small businesses and boost economic growth.

Last week the Department for Business and Trade announced it was considering other new measures to support small businesses, including a ban on retentions and fines for companies that persistently pay suppliers late.

Prompt Payment Code introduced as part of a package of measures aimed at creating a responsible payment culture across UK business. In 2019, five construction firms were suspended from the code for failing to pay 95 per cent of invoices within 60 days.

November 2018

Late-paying firms could be banned from winning public work, according to rules outlined by the government . The new rules were set to be introduced by autumn 2019 to ensure the government only does business with companies who pay their suppliers on time. Cabinet Office minister Oliver Dowden said: From next year, if government contractors are late with supplier payments, they could stop winning public contracts altogether until they clean up their act.

April 2019

The government told strategic suppliers to make sure they met payment-performance targets or face being barred from contracts . Dowden, the minister overseeing implementation, wrote to the governments largest suppliers reminding them to pay suppliers within 30 days. He said: As a signatory to the Prompt Payment Code, you have committed to paying your subcontractors [&] within a maximum of 60 days (this is met by paying 95 per cent of invoices within this period), and to work towards 30-day payment terms as the norm. The minister warned that new legislation would come into force in September, which could see poor payers barred from new contracts worth more than �5m.

October 2021

Construction firms were told that they soon had to pay 90 per cent of invoices within 60 days or risk being excluded from public contracts. Clients, contractors and subcontractors were expected to meet the new standard from 1 April 2022, with an increase on the previous target of 85 per cent.  Adherence to the new payment standard would be checked when companies bid for work worth more than �5m, with those that fell short potentially being barred from winning work, according to a policy procurement notice.

November 2023

Chancellor Jeremy Hunt said firms looking to win significant government contracts would have to show they paid invoices within 30 days. From April 2024, those bidding for government contracts worth more than �5m would need to demonstrate that they paid their invoices within an average of 55 days, or face being barred from jobs. The following year, the average time would be shortened to 45 days, with a 30-day period to be introduced in future.

December 2024

The government launches the voluntary Fair Payment Code in a bid to cut the time small businesses wait for invoices to be settled. It encourages businesses to pay suppliers promptly and fairly, with a tiered system of awards (gold, silver and bronze) to recognise best practices. Awards are valid for two years, after which businesses must reapply. Every business granted an award through the scheme will have to agree to be clear, fair and collaborative with its suppliers, the government said.

June 2025

The Cabinet Office announced plans to amend the Procurement Act 2023 to extend potential bars from bids on central government contracts to all public sector contracts. Under the proposals, the average time allowed to pay would initially be lengthened to 60 days, rather than 45, to allow for performance improvement without impacting delivery of essential services. A consultation on the measures is set to close on 5 September.