Chair's statement on paying government suppliers on time

Small and medium-sized enterprises have a vital role to play in the UK’s economy. Yet Government is not getting the basics right when it comes to promptly paying small and medium-sized enterprises (SMEs), from which it directly buys £4.5 billion of goods and services each year.

It beggars belief that government departments do not record the date when paper invoices, commonly used by SMEs, are first received, and that around a third of SMEs don’t get paid within 30 days by their public sector clients. This is despite government’s claim that it is committed to increasing the role of SMEs in providing public services rather than allowing large companies like Serco and G4S to continue dominating the market, often at the expense of the taxpayers’ interest.

The Cabinet Office, representing the centre of government, should be doing much more to improve current poor practice in departments, which can put SMEs out of business and jeopardises government’s ability to deliver value for taxpayers’ money.

Further information

• National Audit Office report: Paying government suppliers on time
• About Parliament: Select Committees
• Visit Parliament: Watch committees