The government has announced that it plans to only do business with companies who pay their supplies on time.
Coming into force from Autumn 2019, this new initiative is reportedly intended to promote a healthy and diverse marketplace of companies providing public services, as well as protect small businesses.
Cabinet Office Minister Oliver Dowden said: “Companies providing crucial services to the public sector, like supporting prisons and delivering road infrastructure projects, must be paid on time.
“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.”
As part of this effort, the government will also update its supplier complaints service to ensure business voices are heard.
The Public Procurement Review Service, formerly called Mystery Shopper, is a free and anonymous complaints service to help 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 has reportedly helped speed up payment of over £5.2m stemming from government contracts.