Government set to stamp out late payment to small firms
Posted: Sat 6th Dec 2014
The Government has announced today it is set to implement its pledge to force big firms to publish their payment terms to small firms next year.
From 2015, all large companies will have to report on the proportion of contracts they paid at 30 days, 90 days, and 120 days. And they will have to admit how often they missed the payment terms they'd promised.
MP Sajid Javid, Department for Media and Sport (DCMS) Minister said: "This will mean we name and shame poor payers, and also celebrate those that pay on time."
Statistics suggest that last year small firms were owed Â£40bn by big firms that delay their payments, or ask for cash in return for prompt payment.
So it's great to see that the Government has put its money where its mouth is and announced that all central Government departments are now required to pay in 30 days. And all new government contracts require prime contractors to pay their sub-contractors in 30 days.
In fact the DCMS claims to pay 98.8% of its invoices within five days.
All Government suppliers will also be forced to sign up to the Prompt Payment Code whether they like it or not.
And from February 2015 all public bodies will be required by law to pass 30 day payment terms down the entire public sector supply chain.
On Monday, we're running our Government Exchange, which will help small firms pick up tips on securing Government contracts as well as linking them up with departmental procurement chiefs.
So this announcement is great timing. And we applaud it.