Contractors working for umbrella companies or limited companies are likely to endorse comments made by the Minister for the Cabinet, Francis Maude, who has just issued a warning to big business suppliers of Government services – make prompt payments to the smaller firms and contractors they use, or risk being named and shamed.

Mr Maude was forthright in his condemnation of late payments, which adversely affect small enterprises and individual contractors far more severely than bigger businesses.  He said, “Prompt payment is crucial to smaller companies.  The Government has an excellent record on paying our bills quickly and we expect our suppliers to do the same and pay sub-contractors well within the 30-day limit.  When work has been done, especially by an SME, it is just inexcusable not to pay up quickly for that service”.

Ominously for the indolent culprits, he added that the Government would be “keeping a close eye” on the performance of its big suppliers vis-à-vis payments to sub-contractors and “we won’t shy away from naming and shaming those that we find have failed to pay promptly.”

Moreover, the “close eye” Mr Maude spoke of is not just rhetoric – he announced that the performance of prime contractors will be monitored by all Government departments as part of routine contract management processes.  Contractors and SMEs with a grievance can alert the Government to any backsliding over payments due via the “Mystery Shopper” service, the details of which will then be published on its website.  Finally, the Government’s prime suppliers will be pressured into paying more quickly that the 30-day standard by the Crown Representatives Team, which co-ordinates the management of major suppliers across all departments.

Late payers beware.

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