IPSE has reacted to a letter sent to Prompt Payment Code signatories by Margot James, Minister for Small Business, in which she claims that there has been “significant progress in the drive to tackle late payment.”
Late Payment “Remains a Huge Problem”
The Minister said that the Government has led by example, hitting their payment targets, and that challenges against Code signatories had “proved very successful in getting invoices settled quickly, creating dialogue between parties, improving contract terms, and providing assistance welcomed by suppliers and signatories.”
She also confirmed that the statutory duty for large businesses to report on payment practices, introduced by the Small Business, Enterprise and Employment Act 2015, will come into force from 6 April 2017 – and urged PPC signatories to “lead the way by voluntarily providing information as soon as the website goes live.”
But Simon McVicker, IPSE Director of Policy and External Affairs, said, “Being paid late, or not being paid at all, can have a devastating effect on self-employed people. Many depend on being paid on time to run their business. And it’s still happening all too often.”
“Despite recent progress, including on 30 day payment terms through the supply chain, late payment remains a huge problem for the smallest businesses. A staggering three quarters of disputes between freelancers and their clients relate to payment issues.”
Urgent Need for Small Business Commissioner
In her letter, the Minister also referred to the long-promised creation of “a Small Business Commissioner, who will provide help and advice to businesses, including on payment disputes,” but she gave no indication of when the role will be filled and by whom – and this has caused IPSE concern.
“We need to see a Small Business Commissioner installed as a matter of urgency,” said Simon Vickers. “This is not an appointment that can wait until 2017. We need a strong figure who can lead on better payment culture now. We are glad this issue is on the agenda of the new Minister for Small Businesses, and we urge her to prioritise finding ways to support the self-employed as the UK negotiates its exit from Europe.”
The FSB have already stressed the urgency of appointing a Small Business Commissioner. Speaking back in May, the FSB’s National Chairman Mike Cherry said: “The new Small Business Commissioner must have the confidence and respect of the entire business community and the strength to take on large businesses where necessary. The Government should now lay out a timetable so that businesses are clear on when the Commissioner will be in post.”
However, currently there is still no official timeline from the Department of Business for the appointment – merely a statement that the government “will shortly consult on how the Commissioner will operate and handle complaints from small businesses.”
