Cabinet Office minister Francis Maude has unveiled plans to support small and medium sized enterprises (SMEs) by naming and shaming major contractors and clients who withhold payments.
“Prompt payment is crucial to smaller companies,” he said. “The government has an excellent record on paying its bills quickly and we expect our suppliers to do the same and pay sub-contractors well within the 30 day limit.
“When work has been done, especially by an SME, it is just inexcusable not to pay up quickly for that service.
“We will be keeping a close eye on how the big suppliers choose to pay their subcontractors and we won’t shy away from naming and shaming those that we find have failed to pay promptly,” he said.
SMEs will also be encouraged to use a “Mystery Shopper” service to report to government instances where payment is slipping.
The Mystery Shopper service can also be used if a supplier sees a tender they do not understand or a specification that they think is gold plated, and Cabinet Office will raise the issue with the contracting authority concerned, anonymously if necessary.
The Association for Consultancy and Engineering (ACE) welcomed the move.”For smaller businesses, interruptions to cash flow can be extremely serious,” said ACE SME forum chairman Alan Bramwell.
“All organisations, both public and private sector, have a duty to honour the terms of their contractual agreements and pay their bills on time.”