Concerns have been raised that sub-contractors aren’t benefiting from the government's drive for all public sector invoices to be paid within ten days.
According to the Forum of Private Business (FPB), although most government departments are sticking to the ten-day rule, main contractors are in some cases not passing that down the supply chain.
It cited the case of a member, plumbing firm EG Heating and Plumbing, which recently waited 60 days to be paid by a prime contractor on a Ministry of Defence (MoD) deal.
The prime contractor in question, construction firm Interserve Defence, had been paid by the MoD within ten days, the FPB said.
Matt Goodman, head of policy at the FPB, said: “What is the point in main contractors being paid within 10 days if firms further along the supply chain have to wait considerably longer for their money?
“Passing on prompt public sector payments throughout the supply chain would not only help more small firms maintain a healthy cash flow, it would encourage more businesses to bid for public contracts.”
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