Late payment is a problem for many small businesses, but now the UK government itself is missing its own targets to pay its suppliers on time. It said that it intends to be a model payer and settle with 80% of its suppliers within a five-day period and the rest within a 30-day period.
The latest figures, however, show that the government is not meeting these targets. Data for the second quarter of fiscal year 2018/19 reveals that it only paid 75.1% of invoices in five days and 88.8% in 30 days.
This is an embarrassment for the Cabinet Office, which has made a point of leading the crackdown on late payment in the private sector. The government’s failure to meet its targets has resulted in outrage from the opposition.
Jon Tickett MP, Labour’s Shadow Minister for the Cabinet Office, said: “The Cabinet Office has failed to get a grip on this important issue despite talking tough, and this is simply not good enough. Labour will overhaul procurement and ensure that government departments and firms that receive private money to deliver goods or services meet strict payment performance targets.”
Despite the fact that legislation to stamp out late payment has been in place for over 20 years, too many small construction companies still face problems with this issue. Carillion’s liquidation only made the situation worse. When the company went bankrupt, it still owed many subcontractors money for work that they had already completed.