32 of the government’s biggest suppliers have signed up to the Prompt Payment Code, thereby committing to pay 95% of their invoices within 60 days.
The government estimates that small and medium-sized enterprises (SMEs) are currently owed more than £26 billion in overdue payments.
Signatories of the Prompt Payment Code promise to pay on time, without attempting to change payment terms retrospectively. The government revealed that the 32 suppliers will aim to pay within 30 days, and will work towards making this the norm.
Mike Cherry, National Chairman of the Federation of Small Businesses (FSB), commented: ‘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.
‘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.’