The Government has committed to pay 80 per cent of undisputed invoices from small firms within five working days but Whitehall is failing to pay its small suppliers on time.
The latest report from the National Audit Office suggests that a third of Government small suppliers are being paid late.
£40billionn a year is being spent by the Government on goods and services, with almost £4.5bn going on services provided by small business. The 5-day policy was designed to help and benefit small firms but the National Audit Office suggests that there is a risk it is actually boosting bigger suppliers instead.
Head of the National Audit Office, Amyas Morse said: “UK businesses told us they welcome the Government’s commitment to pay invoices early; however, there has been a disappointing lack of effort by the Government to check whether the implementation of the policy is actually helping SMEs.”
“We are also seriously concerned about the prompt payment performance figures publicly reported by departments. These were overstated by the four departments we looked at. It remains to be seen whether the changes proposed in the Small Business, Enterprise and Employment Bill and secondary legislation will be enough to bring about improvements, not just in public sector payment practices but the private sector as well.”