Management

Supply chain bullies to miss out on government contracts under new legislation

David Craik | 30 November 2018 | 5 years ago

The government claims it only wants to do business with companies that pay suppliers on time

Companies could be prevented from winning government contracts if they continue to pay suppliers late, as new legislation is introduced to tackle the UK’s late payment problem.

The government today launched a prompt payment initiative to ensure that all government suppliers and subcontractors are paid on time.

It said that for the first time the failure of companies to demonstrate prompt payment to their suppliers could result in them failing to secure government work until they cleaned up their act.

Coming into force in Autumn 2019, the new payment initiative will ensure the government only does business with companies who pay their suppliers on time, many of which are small businesses. The move, it said, will promote a healthy and diverse marketplace of companies providing public services.

__________________________________________________________________________________

 

Payments scandal: it’s not late payment, it’s unfair payment terms to start with

As the government introduces new measures to fight Britain’s small company payments scandal, Business Advice reveals it is actually excessive payment terms that are causing the real problems.

__________________________________________________________________________________

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

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.

Martin McTague, policy and advocacy chairman for the Federation of Small Businesses (FSB), added: This measure will get the thumbs up from the small business community. This sends a clear message from government that paying late is not okay. Cracking down on big businesses supplying to government, and not paying on time, is a win for small businesses, taxpayers, the wider economy and public services.

James Roberts, politicaldirector of the TaxPayers? Alliance, commented: Getting involved in public procurement is a tough gig for small firms. In the past, bigger contractors have dragged their feet when paying smaller suppliers, causing them cash flow problems and leaving SMEs hesitant to take the work. These proposals finally do something about that.

Named and shamed: 35 worst offending late payers and the crippling impact on small businesses

Topic

Management

Related Topics

How to Effectively Manage Remote Teams in Today’s World
30 August 2023

How to Effectively Manage Remote Teams in Today’s World

Read More →
What is the Difference Between Supply Chain and Procurement?
13 April 2023

What is the Difference Between Supply Chain and Procurement?

Read More →
The Importance of Supplier Relationship Management
12 April 2023

The Importance of Supplier Relationship Management

Read More →
Why Supply Chain Disruptions Occur and How to Prevent Them
22 March 2023

Why Supply Chain Disruptions Occur and How to Prevent Them

Read More →
What is Supply Chain Management?
7 March 2023

What is Supply Chain Management?

Read More →
HMRC publishes no-deal Brexit checklist to keep businesses trading with EU
28 February 2019

HMRC publishes no-deal Brexit checklist to keep businesses trading with EU

Read More →

If you enjoy reading our articles,
why not sign up for our newsletter?

We commit to just delivering high-quality material that is specially crafted for our audience.

Join Our Newsletter