Businesses urged to pay suppliers on time or risk losing out on Government contracts

More than 10,000 businesses have been warned by the Government that they must pay their suppliers on time or face being prevented from winning further Government contracts. Officials from the Cabinet Office have written to the businesses – which include all of the Government’s current strategic suppliers – to remind them of the new rules on prompt payment, which come into force this autumn.

Oliver Dowden, Minister for Implementation, said: “Prompt payment is critical for all companies helping to deliver public services, and particularly small businesses which are the backbone of our economy. That’s why, from September, if Government contractors are late with supplier payments, they could be prevented from winning public contracts until they clean up their act.”

Under the new rules, suppliers who bid for Government contracts above £5 million per annum, who cannot show they are paying 95% of invoices within 60 days, risk being prevented from securing Government contracts.

The new measures follow further moves to level the playing field for small businesses, including an ambition to pay 90% of the Government’s undisputed invoices from SMEs within five days and requiring strategic suppliers to advertise supply-chain opportunities worth more than £5 million on the Government’s Contracts Finder website.

Francis Toye, managing director of Unilink Software Ltd (a formerly small and now medium-sized UK business) said: “These efforts to improve payment times are really important and will help small business in the UK grow and thrive. I applaud the Government for taking these steps to improve prompt payment and hope all companies, including large businesses, will follow their example.”

Suppliers that are not being paid on time are also able to raise complaints and concerns directly to the Government through the Public Procurement Review Service, formerly called ‘Mystery Shopper’, which since 2011 has helped speed up payment of over £6.7 million stemming from Government contracts.

About the Author
Brian Sims BA (Hons) Hon FSyI, Editor, Risk UK (Pro-Activ Publications) Beginning his career in professional journalism at The Builder Group in March 1992, Brian was appointed Editor of Security Management Today in November 2000 having spent eight years in engineering journalism across two titles: Building Services Journal and Light & Lighting. In 2005, Brian received the BSIA Chairman’s Award for Promoting The Security Industry and, a year later, the Skills for Security Special Award for an Outstanding Contribution to the Security Business Sector. In 2008, Brian was The Security Institute’s nomination for the Association of Security Consultants’ highly prestigious Imbert Prize and, in 2013, was a nominated finalist for the Institute's George van Schalkwyk Award. An Honorary Fellow of The Security Institute, Brian serves as a Judge for the BSIA’s Security Personnel of the Year Awards and the Securitas Good Customer Award. Between 2008 and 2014, Brian pioneered the use of digital media across the security sector, including webinars and Audio Shows. Brian’s actively involved in 50-plus security groups on LinkedIn and hosts the popular Risk UK Twitter site. Brian is a frequent speaker on the conference circuit. He has organised and chaired conference programmes for both IFSEC International and ASIS International and has been published in the national media. Brian was appointed Editor of Risk UK at Pro-Activ Publications in July 2014 and as Editor of The Paper (Pro-Activ Publications' dedicated business newspaper for security professionals) in September 2015. Brian was appointed Editor of Risk Xtra at Pro-Activ Publications in May 2018.

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