Big firms with unfair payment practices for suppliers to be excluded from government contracts

Big firms with unfair payment practices for suppliers to be excluded from government contracts
Dan Martin
Dan MartinDan Martin Content & Events

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.

Dan Martin
Dan MartinDan Martin Content & Events
I'm a freelance content creator and event host who helps small businesses and the organisations that support them. I have 18 years of experience as a small business journalist having interviewed hundreds of entrepreneurs from billionaires like Sir Richard Branson to the founders behind brand new start-ups. I've worked for a range of leading small business publications and support groups, most recently as head of content at Enterprise Nation where I was responsible for the prolific output of content on the company's blog and social media. I'm based in Bristol where I run and host regular events with the local small business community and have strong connections to major business organisations in the south west region. In total, I've hosted over 50 events; from intimate meet-ups to conferences with an audience of hundreds including events for international brands like Facebook and Xero. I'm also a big fan of podcasts having hosted Enterprise Nation's Small Business Sessions as well as lots of online events including Facebook Live interviews, webinars and three live web chats from inside 10 Downing Street. With my partner, I co-run Lifestyle District, a lifestyle blog focused on culture, art, theatre and photography. I'm here to help. I'm volunteering free advice calls of up to an hour as part of the Recovery Advice for Business scheme, over the next 6 months. Please get in touch to see how I can help your business. 

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