Money owed to small businesses in the north east has fallen 35 per cent, thanks to a regional initiative to encourage prompt payment.
The Pay Fair campaign, launched in 2014 by Newcastle’s The Journal newspaper, has seen a reduction in the sum due to SMEs from £41bn in 2014 to £26.8bn.
The campaign was set up to address the problem of late payment, and encouraged companies to sign up to the Business Ethics Pledge, established by the North East Institute of Business Ethics (NIBE).
NIBE chairman Kevin Carrick said: “We’re delighted that together with The Journal, NIBE has raised awareness about the issue and we’ve seen a major reduction in late payments to the region’s small businesses.”
Up to £55bn could be outstanding across England thanks to late payers, according to software company Sage.
The problem is being tackled nationally with the introduction last year of the Small Business Act, which includes the proposal of a small business commissioner to arbitrate between SMEs and late payers to preclude court action.