Late payers could be banned from winning government contracts

Companies that fail to pay their suppliers on time could soon be prevented from winning government contracts.

Ministers say the new Prompt Payment Initiative is designed to ease the pressure on small businesses.

It’s due to come into force in the Autumn this year and will ensure the government only does business with companies who pay their suppliers promptly.

Cabinet Office Minister Oliver Dowden said: “Companies providing crucial services to the public sector, like supporting prisons and delivering road infrastructure projects, must be paid on time.

“Paying invoices promptly is vital in providing healthy cash flow, particularly for smaller businesses who are the backbone of the UK economy, to help them survive and thrive.

“From next year, if government contractors are late with supplier payments, they could stop winning public contracts altogether – until they clean up their act.”

The government is also updating its supplier complaints service.

Formerly called Mystery Shopper, the free and anonymous complaints service – now called the Public Procurement Review Service – helps suppliers of all sizes raise complaints and concerns about procurements they’re involved in or about the conduct of contracting authorities.

Since 2011, the service has helped speed up payment of over £5.2m stemming from government contracts.

This follows government measures announced last year to level the playing field for small businesses bidding for government contracts. This includes the ambition to pay 90% of government’s undisputed invoices within 5 days and requiring suppliers to advertise opportunities worth over £5m on the Contracts Finder website.

Please contact Neil O’Callaghan if you would like help with credit control and debt collection.