3 minutes reading time
(534 words)
Keeping the Industry Paid – Why the Construction Act Still Matters
On Tuesday 4th November at 1pm, Construction Matters returns with Gareth Wax, Hamish McLay and Michelle Carr, the Construction Alchemist, to look at why the Housing Grants, Construction and Regeneration Act 1996 still sits at the heart of the industry nearly thirty years on.
When the Act came into force, its aim was simple: to keep money moving through the construction sector. Known as the Construction Act, it was meant to protect contractors, sub-contractors and suppliers from late or withheld payments that had become all too common. Nearly three decades later, it remains a cornerstone of construction law, yet many argue that its impact has softened over time.
The Act introduced three key rights that transformed the way projects were managed: the right to regular payments, the right to clear payment notices, and the right to resolve disputes swiftly through adjudication. It was designed to level the playing field, ensuring that those doing the work were not left struggling while payments sat in limbo.
In reality, the results have been mixed. Payment and “pay less” notices are now standard, although late payments are still widespread. Many smaller firms face delays that threaten their cash flow, even with these protections in place. Some of the problem lies in poor understanding of the rules, yet power imbalances within the supply chain also play a major role.
One area that did work well was the introduction of adjudication as a fast, low-cost way to resolve disputes. Before 1998, disagreements over payment could drag on for months or even years. Adjudication changed that, allowing parties to reach a decision within 28 days, an innovation that saved countless firms from serious financial trouble.
The 2009 amendments strengthened the Act further. They clarified payment procedures, closed loopholes and extended adjudication rights to contracts that were not in writing. It meant that all construction contracts, whether formal or informal, were now protected under the same legal framework.
Even so, familiar challenges remain. Late payments are still a leading cause of insolvency across the sector, and retentions continue to lock away billions of pounds that small businesses need to stay afloat. While the Construction Act set out to ensure fairness, true cultural change across the industry has been much slower to take hold.
As the sector adapts to modern pressures, from rising costs to new compliance demands under the Building Safety Act, the principles of the Construction Act feel more relevant than ever. Cash flow remains the lifeblood of construction, and the right to be paid fairly and on time still matters to every company, large or small.
This episode of Construction Matters will explore whether the Construction Act is still fit for purpose, how it works in practice today, and what lessons can be drawn for the future. Join Gareth, Hamish and Michelle as they share their insights on where the legislation has succeeded, where it struggles, and how the industry can build on its legacy.
Watch live or catch up later on YouTube:
https://www.youtube.com/@SpillingTheProper-Tea
For content enquiries:This email address is being protected from spambots. You need JavaScript enabled to view it.
For podcast/media info:This email address is being protected from spambots. You need JavaScript enabled to view it.
When the Act came into force, its aim was simple: to keep money moving through the construction sector. Known as the Construction Act, it was meant to protect contractors, sub-contractors and suppliers from late or withheld payments that had become all too common. Nearly three decades later, it remains a cornerstone of construction law, yet many argue that its impact has softened over time.
The Act introduced three key rights that transformed the way projects were managed: the right to regular payments, the right to clear payment notices, and the right to resolve disputes swiftly through adjudication. It was designed to level the playing field, ensuring that those doing the work were not left struggling while payments sat in limbo.
In reality, the results have been mixed. Payment and “pay less” notices are now standard, although late payments are still widespread. Many smaller firms face delays that threaten their cash flow, even with these protections in place. Some of the problem lies in poor understanding of the rules, yet power imbalances within the supply chain also play a major role.
One area that did work well was the introduction of adjudication as a fast, low-cost way to resolve disputes. Before 1998, disagreements over payment could drag on for months or even years. Adjudication changed that, allowing parties to reach a decision within 28 days, an innovation that saved countless firms from serious financial trouble.
The 2009 amendments strengthened the Act further. They clarified payment procedures, closed loopholes and extended adjudication rights to contracts that were not in writing. It meant that all construction contracts, whether formal or informal, were now protected under the same legal framework.
Even so, familiar challenges remain. Late payments are still a leading cause of insolvency across the sector, and retentions continue to lock away billions of pounds that small businesses need to stay afloat. While the Construction Act set out to ensure fairness, true cultural change across the industry has been much slower to take hold.
As the sector adapts to modern pressures, from rising costs to new compliance demands under the Building Safety Act, the principles of the Construction Act feel more relevant than ever. Cash flow remains the lifeblood of construction, and the right to be paid fairly and on time still matters to every company, large or small.
This episode of Construction Matters will explore whether the Construction Act is still fit for purpose, how it works in practice today, and what lessons can be drawn for the future. Join Gareth, Hamish and Michelle as they share their insights on where the legislation has succeeded, where it struggles, and how the industry can build on its legacy.
Watch live or catch up later on YouTube:
https://www.youtube.com/@SpillingTheProper-Tea
For content enquiries:
For podcast/media info:
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