Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps his Department is taking to ensure that invoices from small and medium businesses are paid on time by (a) Government and (b) non-governmental businesses.

The Government’s manifesto commits to making sure that businesses are paid on time.

At the end of Q3 2019/20 (the most recent complete set of data):

o 7 of the 16 largest departments were meeting the target of 90% payment within 5 days.

o 13 of the 16 departments were paying at least 95% of their invoices within the 30 day target, with 5 departments achieving 99% or more.

The Government is also taking action to simplify the application process for small businesses wanting to supply to the Government and to increase visibility of subcontracting opportunities. Our ambition is that all departments pay 90% of valid and undisputed invoices from SMEs within 5 days and 100% of valid and undisputed invoices within 30 days.

The Government acknowledges that late payment remains a significant problem for small businesses, who are least able to cover financial shortfalls and find temporary finance more difficult and more expensive to obtain.

We have made it a legal requirement for the UK’s largest businesses to publish information on their payment practises, including the average amount of time taken to pay their suppliers.

Additionally, we will be consulting on strengthening the powers of the Small Business Commissioner to support small businesses that are exploited by their larger partners.

Since launching in December 2017, the Small Business Commissioner has recovered £7.4 million owed to small businesses, as well as naming eight large businesses who had paid their small business suppliers late following the Commissioner’s investigation of a complaint.