The Government will set up a new ‘Small Business Conciliation Service’ (SBCS), which will act to resolve disputes between small businesses and their large-firm clients. Particular focus will be on late payments.
The SBCS was part of the Conservatives’ pre-election manifesto, and it will be included in the new Enterprise Bill that will be featured in the Queen’s Speech next week.
“The purpose is to avoid expensive legal costs and maintain business relationships by reaching mutually satisfactory agreements. This model has worked in Australia and we will explore it, and other models, and find what works best in the UK,” said Sajid Javid, the Business Secretary.
The bill will contain business-friendly legislation that reinforces the Business Secretary’s commitment to improving the future for small businesses. It is expected that the bill will, in Javid’s words, “sweep away burdensome red tape… [and] get heavy handed regulators off firms’ backs’.’
From next April, large businesses will be required to publish information on their payment practices on a biannual basis. The new bill will also reveal the Government’s plans to cut down on how much it costs businesses to comply with regulations. It hopes to the reduce the cost by as much as £10 billion over the next five years.
“In 2008, late payment alone cost British businesses £19 billion. This year, that’s set to exceed £40 billion. The average amount owed to a small business is more than £30,000. You know as well as I what figures like that can do to the cash flow of small businesses – it’s enough to force a company into insolvency,” Javid continued.