Wednesday 5th July, 2017
The government has announced that its biggest suppliers have signed up to the Prompt Payment Code to help small businesses to be paid on time.
32 of the biggest suppliers to the government have voluntarily committed to pay 95% of invoices within 60 days and to work towards adopting 30 days as the norm.
It is estimated that small and medium-sized enterprises in the UK are collectively owed more than £26 billion in overdue payments.
The signatories to the code are major strategic suppliers who typically have contracts across government of more than £100 million. Together they account for around 40% of government procurement spend.
Small Business Minister Margot James said: “We want the UK to be the best place in the world to start and grow a business, but the UK’s small-to-medium-sized businesses are currently owed over £26 billion in overdue payments. Such unfair payment practices hamper a business’s ability to invest in growth, and have no place in an economy that works for everyone.
“It is only right that the government should lead by example, and it’s great to see all 32 of our strategic suppliers signed up and committed to fair payment terms.”
Philip King, Chief Executive of the Chartered Institute of Credit Managers, said: "It is important to see that all of the government’s strategic suppliers are now leading by example by signing up to the Prompt Payment Code. The PPC allows suppliers to raise a challenge if they feel they are not being treated fairly by a signatory, and such challenges are proving successful not only in delivering payment but also in further improving practices and processes. It’s vital that businesses feel confident and have certainty that they will be paid on time, as well as having a route to challenge if they need to."