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Criticism of the Government’s Commitment to Tackling Late Payments

As a long time campaigner on late payments, I echo the criticism made by the respected Association of Accounting Technicians (AAT) about the Government’s commitment to tackling late payments.

In its response to the Department for Business, Energy and Industrial Strategy’s consultation on The Reporting on Payment Practices and Performance Regulations the AAT called the regulations a “wholly misguided and ineffective policy response to the multi-billion pound problem of late payments” and slammed the “restrictive and leading manner of many of the review questions which appear designed to provide BEIS with the answers it requires rather than any genuinely helpful information that could contribute to tackling this immensely serious and ill addressed problem.”

I share the concerns expressed so eloquently by the Association of Accounting Technicians about this consultation and the Government’s wider lack of commitment to tackling the scourge of late payments.  In these uncertain times and as the economy recovers from the pandemic, small businesses working across the public and private sectors need the security of payment wherever they are in the supply chain. For the Government to publish a consultation with restrictive and leading questions shows a disregard for hearing the views of key stakeholders and reduces engagement to a ‘tick box’ exercise.

Time and again Ministers state in Parliament they are committed to change in this area and holding large companies to account for their payment practices.  But progress on tackling late payments by this government has been painfully slow when you consider they promised to wage war on late payments following the recommendations from my all party inquiry into the issue in 2013. Although late payments have come down slightly from the high of £41.5bn in 2014 to £25bn currently, according to the latest BACS data, they are still way to high.

The reality is, despite my meeting with several ministers, most recently Michael Gove, when he was at the Cabinet Office, which has responsibility for public procurement and the late payments in public contracts, he failed to deliver on project bank accounts which would stop late payments to small contractors, and also submitting amendments to the Building Safety Bill on this issue, none of them have delivered.

I will keep pressing Ministers to take action, the first step of which should be to implement my Project Bank Accounts Bill.

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