Government reponse on late payment inquiry disappointing

The government has been slammed for lack of conviction and a disappointing response to a cross-party inquiry into late payments to SMEs.

Campaigners hit out at a series of vague statements from the coalition that followed July’s publication of 11 recommendations to tackle the issue of late payment, especially to SMEs.

The recommendations from a cross-party panel of MPs headed Debbie Abrahams included calls for a raft of specific measures such as good practice guidance and more robust advice to businesses.

However the ministers couched their response in vague assurances such as the government was "looking" at reforms to public procurement and it "believes" SMEs are vital to securing economic recovery.

Abrahams, who launched the Be Fair – Pay on Time campaign and chaired an all-party late payments inquiry in April, said: "The government’s response to the report does not appear to recognise that late payments reflect an unethical business culture. Nor does it respond specifically to many of the recommendations.

"The government has done nothing concrete during three and a half years in office to help SMEs in relation to late payment. Their response has no sense of urgency or conviction about it and will leave SMEs wondering if they really understand the issue at all."

Forum of Private Business chief executive Phil Orford: "Late payment remains a real problem for our members so we’re disappointed the government has not committed to taking some of the practical steps the report recommended to combat it.

"More needs to be done to join up business support packages and raise awareness of them among SMEs. And, while supporting SMEs manage their cash flow is important, late payment is a deeper problem than simply poor management on their part."

Late payments have been a major issue for many businesses in the print industry for many years, although BPIF chief executive Kathy Woodward said that the organisation's latest figures indicate that the situation had not deteriorated in recent months.

She said: "This is always a sensitive issue and although it would be great if the government would legislate, in reality those rules would only be bent to fit whatever contract the terms applied to.

"The government is a major buyer, so if they lead by example on this, it would be a big help."