Skip To The Main Content
05 July 2017

New prompt payment code signatories get thumbs up from small businesses

The Federation of Small Businesses (FSB) welcomes today’s announcement that 32 of the Government’s biggest suppliers have signed up to the Prompt Payment Code. The move represents a positive step in tackling the poor payment culture that is rife in the UK.

Research from the FSB highlights that the UK’s poor payments culture costs the UK economy £2.5bn each year and kills 50,000 small firms. 30 per cent of small businesses report that, on average, 30 per cent of payments are typically late. In 2016 the average value of each late payment stood at £6,142.

FSB National Chairman Mike Cherry said: “It is good to see the Government fulfilling one of its manifesto pledges by getting big Government contractors to sign up to the Prompt Payment Code. For far too long small businesses have been subjected to supply chain bullying and victims of the poor payment culture rife in the UK.

What the small business community needs now is further action to give the voluntary Prompt Payment Code even greater teeth. The Government should make it mandatory for all FTSE 350 businesses to sign up to the Prompt Payment Code and introduce a tough penalties regime for repeat offenders of poor payment practices.

This should come in the form of a ‘three strikes and you’re out’ policy where signatories are struck off if they do not pay within the time frame. Additionally, the soon-to-be-appointed Small Business Commissioner needs to be given greater responsibility to review and refresh the Prompt Payment Code, and have the powers and resources to make a real difference to the £28bn currently held up in late payment.

The Government needs to act now and be the agents of change in improving the UK’s payment culture and address some of the unacceptable practices carried out by larger companies.”