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Government to use Procurement to Clamp Down on Late Paying Companies

April 12 2018

Cabinet Office Minister Oliver Dowden has annouced new government proposals to tackle the culture of late payment among the UK's largest companies. Under new rules being considered, any companies tendering on major government procurements would be excluded unless they could demonstrate that they pay their own suppliers and subcontractors fairly.

Other proposals include a mechanism whereby small subcontractors and suppliers to companies on government contracts can report poor payment practice.

Government estimates that it spends 5.6 billion directly with small businesses, but when sub-contracts to small businesses from larger suppliers was taken into account, total spend rose to 12.2 billion.

Commenting on the proposals, Oliver Dowden, Minister for Implementation, said

"This government is listening to the business community and is committed to levelling the playing field for smaller suppliers to win work in the public sector. 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."

Samantha White, CEO of My Credit Controllers, said

"With statutory reporting of payment times by large companies in place, it is a welcome development that government is using its significant role in the economy to encourage better payment practices"

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