Government highlights public sector on rules on supplier payment
Minister for Implementation Oliver Dowden has reminded public sector organisations that they must pay suppliers on time.
Dowden (pictured left) is reiterating the Government’s November 2018 announcement that from 1st September 2019, any organisation that bids for a central government contract worth over £5 million a year will need to demonstrate it has effective payment systems in place to ensure a reliable supply chain. The government is expected to lead by example by paying their suppliers within 30 days.
Dowden commented: “We are being very clear with government suppliers that they must pay their supply chain on time or face losing future government contracts. So it’s only right that we say to the public sector that they must lead by example and make sure their suppliers are paid on time.”
The Building Engineering Services Association (BESA) has welcomed the updated Prompt Payment guidance, clarifying what suppliers should take note of in their approach to payment in major procurement contracts.
The Government has set a standard of 95% of all supply chain invoices to be paid within 60 days for organisations who want to do business with Government. Suppliers who do not comply with this standard could be prevented from winning government contracts.
BESA has urged businesses bidding for public sector procurement to ensure their organisation is publishing payment reports where required and to read latest piece of guidance to understand how government departments will be implementing the changes from 1 September and what is expected of them.
The government’s Public Procurement Review Service (PPRS) allows suppliers to raise any concerns they have about public sector buying and prompt payment. Statistics from the PPRS show that between April 2018 and April 2019, more than £2.5 million in late payments were ‘unblocked’.
BESA CEO David Frise says: “This is a very important step towards tackling late payment and retention abuse in the industry. For progress towards responsible payment practices to be made across the whole economy, the public sector must lead the way by example.
BESA has strongly backed the Aldous Bill to establish a retention deposit scheme and has played a crucial role in building a coalition of supporters for this important reform to deliver payment certainty for the industry. Frise points out that the UK lags behind other countries that enacted legislation cracking down on retention abuse like Germany, France, Australia, Canada and New Zealand.
Frise adds: “BESA understands that maintaining the status quo is unacceptable and that retention reform is essential for small and medium businesses. This campaign still has a long way to go but it’s important that we acknowledge the positive efforts currently being rolled out in the public sector.”
Picture credit: Shutterstock/Maree Stachel-Williamson