News & Media
October 08, 2021

A digital register for NEC payments will boost both quality and safety

A digital register for NEC payments will boost both quality and safety By Rudi Klein

The tragic Grenfell tower block fire in west London four years ago left 72 people dead and over 70 injured. Although there is still an ongoing inquiry into all aspects of the fire, the construction industry has borne the brunt of the blame. The fire’s rapid spread has been attributed to a faulty cladding system and led to intense scrutiny of industry practices both in the UK and internationally.

Dame Judith Hackitt led an independent review for the government of building regulations and fire safety (Hackitt, 2018). It spawned the building safety bill that is now going through the UK Parliament. This will create the role of a building safety regulator, who will have oversight of all building safety matters relating to high-rise buildings.

However, there is one aspect of Dame Judith’s report which has received little attention. She castigated prevalent industry culture as undermining building safety. ‘Payment terms within contracts (for example, retentions) can drive poor behaviours, by putting financial strain into the supply chain. For example non-payment of invoices and consequent cash flow issues can cause subcontractors to substitute materials purely on price rather than value for money or suitability for purpose.’

Digital payment register

She proposed that contracts, payment terms and practices should be recorded as part of her recommended building safety file. I suggest NEC users take this further. The October 2020 amendments to NEC4 option Y(UK)1 – the project bank account option − introduced a project bank account tracker to record all payments to and from the account. I believe we should introduce a digital register for all NEC projects, which tracks payments made to and from all project participants above, say, a contract threshold of £30,000.

Some digital platforms can facilitate discharge of payments from the client directly to all project participants. By requiring such a digital register, NEC will be support building safety as well as helping to improve construction quality in general. 

Reference
Hackitt J (2018) Building a Safer Future, Independent Review of Building Regulationsand Fire Safety: Final Report, https://www.gov.uk/government/publications/independent-review-of-building-regulationsand-fire-safety-final-report
POSTED BY NEC Contracts
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