‘Slow payment is an abuse of smaller businesses. It is holding back millions of small and micro-businesses throughout the supply chain, who provide much of the employment, training and growth potential in the economy,’ said Reeve. ‘During 2013, we have seen all sorts of messages from government that is understands the urgent need to tackle late payment, but now we are looking for clear and meaningful action. The case for prompt payment has been well made, many times, and what it needs now is leadership.’
Reeve continued, ‘The government has talked about plans for a legally backed commitment to passing prompt payment terms down the public sector supply chains, but so far it has not delivered. We are asking the government to send a strong message to buyers about what socially acceptable payment periods look like. For us, this means excluding from public sector procurement companies who fail to pay their supply chain within 30 days for at least a year.’
He added, ‘Over the last decade a number of well intended payment codes and charters have failed to make any significant impact on this vitally important issue. We have heard talk about strengthening the ‘Prompt Payment Code’ but if the Code is not radically improved, it should be scrapped, because it is simply getting in the way of initiatives that would work, such as effective legislation. Within our own sector, we have the new Fair Payment Charter. It contains some very good words, which could make a difference if there were some compelling consequences for those who sign, and for those who don’t. Without consequences, however, the Charter is simply a “hit and hope” response.’
Reeve concluded, ‘Delays on dealing with slow payment will not help small businesses to grow and we know that for some, it will mean the end of the road. With parts of construction moving into recovery, we need a business climate that helps businesses to survive and grow, right through the supply chain. We trust Matthew Hancock will make late payment a priority, and help to do away with a bad business practice which has held not just our own sector, but smaller businesses in general, back for far too long.’
