Payments Compliance Notices are a new reporting requirement introduced by the Procurement Act 2023, aimed at improving transparency around how contracting authorities have complied with their duty to make payments to suppliers within 30 days.
This noticing regime will come into effect from 1 October 2025, with the first reports covering payments made after this date. Here is the key information you need to know to stay on top of these new compliance requirements.
What are Payments Compliance Notices?
A Payments Compliance Notice is a report published by contracting authorities on the Central Digital Platform. The notice details how promptly the authority has paid invoices under public contracts during a six-month reporting period, measured against the prompt payment rules. The notice is intended to provide transparency and encourage faster payments by allowing comparison with private sector practices.
What Contracts are in-scope?
The requirement to publish a Payments Compliance Notice only applies to "public contracts" (as defined in the Act) that fall within scope. So there is no need to publish a notice in relation to contracts below the financial thresholds or payments under grants.
In addition, the notices do not need to cover the following types of public contract:
- Concession contracts;
- Contracts entered into by Northern Ireland authorities;
- Contracts entered into by schools; and
- Contracts entered into by private utilities.
While strictly speaking only in-scope public contracts require reporting, authorities may choose to publish notices voluntarily. This would provide greater transparency, for below-threshold contracts in particular.
Contents of Payments Compliance Notices
Regulation 38 of the Procurement Regulations 2024 specifies the content requirements for these notices. This includes:
- Contracting authority information;
- Start and end dates of the relevant six-month reporting period (see below);
- Details of payments made under public contracts, including:
- The average number of days taken to pay invoices, counting from the day after the invoice is received; and
- The percentage of payments made within specified timescales (0- 30 days, 31 to 60 days and 61+ days);
- The percentage of invoices paid in compliance with the prompt payment regime (i.e. within 30 days from invoice receipt or by the date the payment falls due (whichever is later)); and
- A signed statement from a finance director or equivalent officer approving the notice.
Reporting Periods and Deadlines
The reporting periods are fixed six-month windows from 1 April to 30 September, and from 1 October to 31 March.
Payments Compliance Notices must be published within 30 days of the end of each reporting period if any payments or invoices became due during that time.
Consequences for Non-Compliance
While the Act does not impose direct penalties for non-publication, the newly established Procurement Review Unit (PRU) has powers to:
- Investigate compliance;
- Issue recommendations and require progress reports;
- Publish reports highlighting non-compliance;
- Provide guidance on lessons learned.
These measures aim to encourage transparency and timely payments without punitive sanctions.
Conclusions
Payments Compliance Notices represent a significant shift towards greater transparency in public sector payment practices. With the regime coming into effect from 1 October 2025, contracting authorities should ensure they have implemented systems and processes to ensure compliance with the new six-monthly reporting requirements. Understanding which contracts fall within scope and establishing robust payment tracking mechanisms will be essential for meeting the deadlines and avoiding scrutiny from the Procurement Review Unit.
If you need more information or guidance on navigating these new requirements, please contact Louis Sebastian or Rebecca Rees.
