The UK Government has launched a consultation on reforms to tackle late payments, aiming to strengthen payment practices, improve cash flow across supply chains, and ensure fairer treatment for small businesses. The consultation proposes significant changes, including new board-level reporting requirements, a hard cap on payment terms, mandatory statutory interest on late payments, and two possible approaches for the future of retention payments in construction — a full ban or the introduction of protection schemes.

CIOB responded to the consultation, which closed on 23 October 2025. Our submission highlighted the urgent need for reform to address the culture of late payments in construction, noting that small businesses are disproportionately affected by payment delays and insolvencies further up the supply chain. We also called for the eventual abolition of retention payments, supported by a clear transition plan, and for continued collaboration between Government and industry to create a fairer, more transparent payment environment.

The CIOB’s full consultation response can be downloaded to the right of this page.