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Industry and regions minister Margaret Hodge has announced plans to improve payment practices throughout the construction industry as part of the Construction Act review.

The consultation will seek to introduce greater transparency into the statutory payment framework to help construction companies manage cash flow better. Firms will also be encouraged to resolve disputes through adjudication and identify how the costs and benefits of the package can be evaluated.

The consultation is being launched in conjunction with Andrew Davies, the Welsh Assembly government minsiter for social justice and public service delivery and is being developed with broad industry support and involvement.

Margaret Hodge said: "It is essential for the construction industry that we have in place a system which delivers fair payment practices. The framework set out in the 1996 Construction Act has delivered some improvements but recent industry surveys say that poor payment practices continue to be a key issue for many in the industry. We must change that. I believe this package represents good progress in securing a better payment system for the industry."

Peter Rogers of Stanhope plc, a member of the sounding board said: "Fair payment must underpin more integrated working practices. The construction industry now has the opportunity to consider measures which should be in the better interests of all of us."