Partner Article

Initiative not working says FSB

A PUBLIC sector initiative to pay invoices within 10 days is not being passed on by main contractors to smaller suppliers, the Forum of Private Business (FSB) has claimed.

While official figures show most central Government departments pay main contractors within 10 days the FSB’s research has found that some sub-contractors and suppliers have been left waiting for payments for months at a time.

Taking up the case of its Glasgow-based member EG Heating and Plumbing Ltd, which was recently forced to wait 60 days to be paid by Interserve Defence despite the construction company having been paid by the Ministry of Defence (MoD) within 10 days, the Forum has raised the issue with Peter Luff MP, the Minister for Defence Equipment, Support and Technology.

The Forum has suggested that, by ensuring it is passed along the supply chain, prompt payment could be used as an incentive for more small businesses to sub-contract on government-sponsored projects.

“For many smaller sub-contractors this is the real story behind the commitment to prompt public sector payment,” said The Forum’s Head of Policy Matt Goodman.

“What is the point in main contractors being paid within 10 days if firms further along the supply chain have to wait considerably longer for their money?

“Passing on prompt public sector payment throughout the supply chain would not only help more small firms maintain a healthy cash flow, it would encourage more businesses to bid for public contracts.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .