Question to the Cabinet Office:

To ask the Minister for the Cabinet Office, what steps his Department is taking to ensure that SME suppliers are paid on time.

The Procurement Act 2023 introduces a range of reforms to make it easier for SMEs to access public sector supply-chains, and we will be ensuring that the powers in the Act are utilised to support the new government’s priorities. A new duty will require contracting authorities to have regard to the particular barriers facing SMEs, and to consider what can be done to overcome them. 30 day payment terms will apply throughout the public sector supply chain, regardless of whether they are written into the contract.

Government must lead by example and pay their suppliers on time. The most recent published payment data for the Cabinet Office shows 97% of all invoices were paid within 30 days, and 88% of all invoices were paid within 5 days. Further, all bidders for large government contracts must demonstrate prompt payment to their suppliers within an average of 55 days, regardless of whether it’s in a public supply chain or not, or risk being excluded from the procurement.