Credit, collections & insolvency news
The Government’s Business Secretary Greg Clark’s has made an announcement on a package of measures to safeguard small firms from late payments.
Reacting to the news Federation of Small Businesses (FSB) National Chairman Mike Cherry said “Late payment is the biggest challenge affecting small businesses and it is good to see the Government getting serious about this issue. The voluntary Prompt Payment Code is not working when it allows signatories like Carillion to pay on terms of over 120 days, so we want to see a new tough and transparent compliance regime being proposed. Involving the Small Business Commissioner Paul Uppal with the Code is also right as that shows a more joined-up approach to this difficult issue.”
“Further, it is a positive step that central government will set an example – paying 90% of undisputed invoices from small and medium-sized businesses within five days.”
“It’s particularly positive to see the Government has listened to our proposal to make company boards appoint Non-Executive Directors with responsibility for supply chain practice. This is the only way to transform boardroom culture in the UK, where it has become acceptable to pay small firms late if it helps cashflow, as we saw in the case of Carillion prior to its collapse. The move to appoint a dedicated NED responsible for the supply chain within each government department is a really positive example to set, and one which large companies must now follow. It was good to see the Chancellor confirm at conference that the Government backs business as the cornerstone of a successful economy.
“Philip Hammond made important announcements, with a £125 million investment in leadership and management skills for SMEs, helping to support entrepreneurs for the future. He also announced that, from April 2019, large businesses can transfer a quarter of their apprenticeship levy funds to their supply chain, which has been a key ask of FSB to stop the decline in the number of people taking up apprenticeships.”
