The Construction Confederation (CC) has challenged Government figures which claim that changes to the Construction Act could achieve savings of £1bn - and suggests it is more likely to actually impose a regulatory burden.

CC Chief Executive Stephen Ratcliffe said: "These proposed changes are disappointing, divisive and dubious as they appear to be backed by a doubtful set of unsubstantiated numbers suggesting massive savings in order to justify a lengthy and unnecessary review.

"The figures bandied about with reference to pay-when-certified clauses in civil engineering sub-contracts, for example, demonstrate that there is little understanding of how sub-contracts actually work. They fail to recognise that there would be more than one payment process per contract and so the estimate of costs to contractors are woefully inadequate.


"Elsewhere, far from reducing costs, proposals to include verbal contracts within the legislation will only serve to make adjudication over disputes a lengthier and more costly process.

"We believe there is a real risk, at a time of rising economic uncertainty, and in addition to existing regulatory burdens, that these changes will actually bring more red tape and increased costs to the industry. That is why we suggested the sensible route of improving guidance on the existing legislation which was achieved through consensus.

"Guidance could usefully be developed and published to identify best practice and explain how the legislation works. The OGC's Fair Payment Charter is a good example of how the industry is addressing this issue as are the 2012 Olympic Commitments.

"Those who choose not to pay will ignore legislation in whatever form it is presented - further regulation will serve only as an administrative burden to the vast majority of contractors who currently comply."

(CD/JM)