Question to the Cabinet Office:

To ask the Minister for the Cabinet Office, how many (a) fines and (b) penalty notices his Department issued to public sector bodies for not adhering to the prompt pay policy in 2018.

The Government recognises that the public sector should set a strong example by paying promptly. Under the prompt payment policy, public sector bodies are required to include 30-day payment terms in new public sector contracts; and this payment term must be passed down the supply chain. They are also required to publish annual payment performance data.

While there is no provision to issue fines or penalty notices to public sector bodies that do not adhere to the prompt payment policy, we encourage businesses to report poor payment practice and instances of late payment in public sector contracts in breach of contract terms, to the Public Procurement Review Service, who will investigate. The service also undertakes its own proactive investigations into payment performance.

Following a public consultation, in November 2018 a new prompt payment initiative was announced to ensure all Government suppliers and subcontractors benefit from being paid on time. For the first time, failure of companies to demonstrate prompt payment to their suppliers could result in them being prevented from winning government contracts.

Coming into force in September 2019, this will ensure the Government only does business with companies who pay their suppliers on time, many of which are small businesses. The move will promote a healthy and diverse marketplace of companies providing public services