The government could bar contractors who pay late from winning public work, it has warned.
Minister for implementation, Oliver Dowden, made the announcement yesterday, in a warning to companies who fail to demonstrate prompt payment to their suppliers.
The government is introducing the measure in autumn 2019, saying it wanted to “promote a healthy and diverse marketplace of companies providing public services”.
Dowden, who is a Cabinet Office minister, said: “Companies providing crucial services to the public sector, like supporting prisons and delivering road infrastructure projects, must be paid on time.
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“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 will also update its supplier complaints service, which it said was a sign of its commitment to small businesses.
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 claims to have helped speed up payment of over £5.2m stemming from government contracts.
Earlier this year, the government announced an ambition to pay 90% of government’s undisputed invoices within five days and requiring suppliers to advertise opportunities worth over £5m on the Contracts Finder website.
