Public sector ‘must lead by example’ on paying suppliers

18 Jul 19

Public sector bodies have been urged to pay outsourced suppliers on time after the sector registered £2.5m in late payments.

Organisations including schools, hospitals and local authorities must “lead by example” when paying companies in their supply chain, the Cabinet Office has said.

The government currently warns its suppliers that they must pay 95% of their invoices within 60 days or face being blocked from securing future government contracts.

And the Cabinet Office has now said that all public sector bodies should “lead by example” by paying their suppliers within 30 days – half the grace period for suppliers.

Minister for implementation, Oliver Dowden, said: “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 Public Procurement Review Services department enables suppliers to raise concerns about public sector buying and payments.

The latest statistics published by the PPRS show more than £2.5m in late payments between April 2018 and 2019.

A large number of complaints to the PPRS – 61 – were about late payments from the wider public sector, whereas just eight related to central government.

Martin Traynor, crown representative for small business, said: “Making sure companies in the government supply chain are paid on time is very important – particularly for small business.

“The difference between waiting 60 days and having to wait 90 days can be make or break for many small companies, so it’s vital that both the private and public sector work better in this area.”

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