New commissioner to tackle late payment culture

Published:  28 July, 2015

Proposals for a new Small Business Commissioner to lead a culture change in how small businesses resolve disputes with larger companies have been set out by the Department for Business Innovation & Skills.

The Small Business Commissioner would help small businesses handle disputes over late payments and other supply chain practices that hit them especially hard. It would help small firms access advice, support, mediation and conciliation services, and have the power to look into complaints and report on its findings.

This delivers on the government’s pledge to deliver a small business conciliation service and goes further to ensure it fundamentally tackles unacceptable payment practices that hit small firms.

Small Business Minister Anna Soubry said: “The government is backing small businesses to grow and create more jobs and opportunity. Small businesses are owed £26bn in late payments and spend millions more chasing down money they have already earned through hard work. This is simply unacceptable – it limits their growth and productivity, and can put an otherwise successful business at risk.

“The Small Business Commissioner will tackle the imbalance of bargaining power between small suppliers and large customers, and encourage them to get round the table and sort out disputes at a fraction of the cost of going to court. It will also provide advice, investigate complaints and see where further action is needed to clamp down on unfair practices.”

This is one of a number of measures to tackle late payment. The Small Business, Enterprise and Employment Act 2015 introduced a reporting requirement for the UK’s largest companies to report on their payment policies and practices.

The Small Business Commissioner will be able to use this data to name and shame those behaving badly and celebrate those leading the way by paying promptly.

The government is also publishing a discussion paper on the Small Business Commissioner and is asking businesses for views on its proposals.

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