0 £0.00
This item was added to your basket

Dear visitor,
You are viewing 1 of your 1 free articles

We’ve made wider, important changes to our print and online content to enhance the value of exclusive, insightful, discerning content we create every day. Support valuable editorial content by becoming a member of our Credit Club - register for free or choose a paid plan.

Register now or Login

FSB makes three-point late payment reforms proposal

The Federation of Small Businesses (FSB) has issued a three-point plan to reform payment practices and “protect small suppliers against another Carillion payment scandal”.

A year on from the construction giant’s collapse, the body is recommending strengthening the Prompt Payment Code, adopting project bank accounts, and assigning non-executive directors to oversee the supply chain.


Project bank accounts see members of the construction supply chain – many of which are SMEs – receiving payment in five days or less from the due date, with the aim of easing cashflow through the system and supports closer working within the supply chain.


A YouGov poll commissioned by the Association of Accounting Technicians (AAT) and published this month showed that almost three quarters (73 percent) of MPs agree with reforms to the Prompt Payment Code.


The reforms are that the Prompt Payment Code:

  • Be made compulsory for companies employing more than 250 employees;
  • See maximum payment terms halved from 60 to 30 days;
  • Be supported by a clear, simple financial penalty regime for persistent late payers, enforced by the Small Business Commissioner.

FSB national chairman Mike Cherry said: “The collapse of Carillion was a watershed moment that brutally exposed the shocking ways that some big businesses treat their suppliers.


“The construction giant used its dominant position to squeeze smaller firms with late payments and unreasonable payment terms in an attempt to shore up its own precarious position. These practices did not save them and their failure has resulted in very real human consequences.

Many small businesses were left with nothing for the hard work they had undertaken beforehand and given nothing in compensation after. Some didn’t survive.


“A year on, we have seen the government be proactive in attempting to improve public procurement and stamp out poor payment practices. Recent reforms to crackdown on public sector suppliers that don’t pay on time are welcome and send a clear message that paying late is not okay. However, more must be done to ensure private, as well as public sector, supply chains pay on time.”


He added that assigning non-executive directors to take responsibility for supply chains is “the way to shift poor payment culture outside of British boardrooms.”



Gold bullion dealer Stunt bankrupt after building up £14m debt

Gold bullion dealer Stunt bankrupt after building up £14m debt

Arcadia Group creditors approve CVA

Arcadia Group creditors approve CVA

FCA rules for buy-now-pay-later products could save customers up to £60m

FCA rules for buy-now-pay-later products could save customers up to £60m

Upcoming events

Car Finance Conference

Car Finance Awards

Collections & Vulnerability Summit

Credit Strategy
LinkedIn page

Did you find our website useful?

Thank you for your input

Thank you for your feedback

creditstrategy.co.uk – an online news and information service for the UK’s commercial and consumer credit industry. creditstrategy.co.uk is published by Shard Financial Media Limited, registered in England & Wales as 5481132, Axe & Bottle Court, 70 Newcomen St, London, SE1 1YT. All rights reserved. Credit Strategy is committed to diversity in the workplace.
@ Copyright Shard Media Group