Calls for government contract bans for repeated late-paying businesses

The Federation of Small Businesses (FSB) has called for repeated late-paying businesses to be banned from getting government contracts in Scotland.

The Association of Independent Professionals and the Self-Employed (IPSE) welcome these calls and warn that late payment issues are also a concern across the rest of the UK – particularly for the smallest businesses, the self-employed.

IPSE Senior Policy Advisor Jonathan Lima-Matthews, commented, “The culture of late payment is the scourge of the UK’s smallest businesses, the self-employed. This is by no means just in Scotland: it is a serious problem across the UK.

“IPSE research has shown freelancers spend an average of 20 days a year chasing late payments, with 43 per cent doing work they were not paid for at some point in their career.

“The situation is almost at crisis levels in the creative industries, where freelancers have been found to lose a staggering £5,400 a year on average.”

He added, “At IPSE, we wholeheartedly support the FSB’s calls for the Scottish government to ban late-paying businesses from public contracts. We also call on the Scottish government – like the UK government – to sign up to the Prompt Payment Code.

“More needs to be done right across the UK. First and foremost, Small Business Commissioner Paul Uppal should be given more powers to clamp down on late payment – including fining the worst offenders. And we would urge the Office of the Small Business Commissioner to roll out its new ‘traffic light’ system soon to shine a light on bad practice.”

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