On 20 March 2013, the Chancellor of the Exchequer, George Osborne, set out the government’s spending and taxation plans in its 2013 Budget. It also published its Infrastructure delivery update (March 2013), which sets out the progress that has been made on 40 key infrastructure investments identified in the National Infrastructure Plan 2011 (NIP 2011), and the Plan for Growth implementation update 2013.
In announcing the government’s plans, the Chancellor said it was a budget for:
“…people who realise there are no easy answers to problems built up over many years… for those who aspire to own their own home; who aspire to get their first job; or start their own business… for those who want to save for their retirement and provide for their children.”
The 2013 Budget announced “an ambitious programme of structural reform” to improve the UK’s infrastructure, with a commitment to increase capital spending by £3 billion from 2015-16 and £5.4 billion of financial support to tackle what the government sees as long-term problems in the housing sector.
Despite the headline-grabbing infrastructure numbers, it seems there is little detail for the construction industry to cheer about, and the spending will not kick in until after the next general election.
The Late Payment of Commercial Debts Regulations 2013 (SI 2013/395) were made on 21 February 2013 and come into force on 16 March 2013. The Regulations implement the changes required by the Late Payment Directive (2011/7/EU) and will apply to commercial contracts made on or after 16 March 2013 for the supply of goods or services. As previously reported, where a public authority purchases goods or services, interest will start to run on outstanding payments from 30 days after the latest of receiving the supplier’s invoice, receiving the goods or services, and verification or acceptance of the goods or services (where provided for by statute or contract). The same rules apply to a business purchasing goods or services where the parties have not agreed a due date for payment. However, a business and a supplier can agree a due date for payment of up to 60 days after the latest of the events listed above, and, if the extension is not “grossly unfair” to the supplier, can expressly agree to extend the due date for payment beyond that. (If a public authority or business purchaser agree an earlier due date for payment with a supplier, interest will run from that date.) Defaulting purchasers are required to pay interest at a rate of 8% over the statutory rate, or a rate which provides a “substantial contractual remedy”, and compensation for the cost of recovering the debt.