Big firms with unfair payment practices for suppliers to be excluded from government contracts
Posted: Mon 9th Apr 2018
Ministers have proposed measures to help small businesses win more public sector contracts by punishing firms with bad payment practices and blocking them from winning public-sector work.
In an effort to "level the playing field for government suppliers of all sizes", the government will consult on excluding suppliers from major public sector deals if they cannot demonstrate fair payment practices.
Subcontractors will also be given greater access to report poor payment performance, while the prime minister has written to Cabinet ministers to nominate a 'small business champion minister' in each department.
In addition, major public sector suppliers will be asked to nominate an 'SME champion', and a letter from Cabinet Office minister Oliver Dowden will "underline the government's expectations on prompt payment of subcontractors".
Further requirements mean suppliers have to advertise subcontracting opportunities on the Contracts Finder website, and report on how businesses, including small firms, in the supply chain are benefiting from supplying goods and services to central government.
"We have set a challenging aspiration that 33% of procurement spend should be with small businesses by 2022 and are doing more than ever to break down barriers for smaller firms," Dowden said.
"Small businesses are the backbone of the UK economy, and play a key role in helping us to build a strong, viable private sector that delivers value for taxpayers and jobs for millions all over the UK."
Emma Jones, Enterprise Nation founder and the government's Crown Representative for Small Business, added: "Securing a government contract is a great way for small firms to bring in a steady income stream that can really help their business to grow.
"These measures demonstrate the government's clear commitment to small business, ensuring they can easily find and access new opportunities to supply to government."
The proposal to block firms with poor payment practices from government contracts is the latest measure aimed at tackling late payment.
Last year, ministers appointed Paul Uppal as Britain's first small business commissioner. He is tasked with helping small businesses tackle late payment of invoices, resolve disputes with larger businesses and highlight resources that can help.
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