The Government has repeatedly pledged to crack down on late payments – and Chancellor Philip Hammond used his Spring Statement to issue his last vow to “eliminate the continuing scourge of late payments”.
The collapse of Carillion also exposed its policy of making small businesses wait 120 days before being paid.
New research by the Federation of Small Businesses (FSB) found around 90 per cent of small suppliers to central and local government are paid late.
FSB boss Mike Cherry said: “Our research highlights a shocking failure in the public sector – the Government needs to get a grip if we are to have a chance of stamping out the poor payment culture running rampant in the UK economy.
“It is unfair and unacceptable that so many small firms, many of which are already struggling with the high cost of doing business, are also being forced to wait for money they are owed for work completed for the public sector.
“By improving public sector payment practices, the Government can bring some fairness to the public procurement process and help reduce the risk of public sector contracts for small businesses.
“Crucially, this would also prevent Carillon-type practices happening again.”
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