UK government announces Small Business Conciliation Service to tackle late payment

Will Green is news editor of Supply Management
19 May 2015

New business secretary Sajid Javid has announced an Enterprise Bill that will include the establishment of a Small Business Conciliation Service to deal with late payment.

The service, outlined in the Conservative manifesto, will “help settle disputes between small and large businesses, especially over late payment practices”.

“Small firms are owed over £32 billion in late payments, but many of them are not aware of their rights or are reluctant to launch legal challenges,” said the Department for Business, Innovation & Skills.

“This service will build on the existing suite of measures to tackle poor payment practices.”

The bill, which will be included in the Queen's speech on 27 May, will also include a commitment to cut red tape “by at least £10 billion” over the next five years and measures to support entrepreneurs and create jobs.

Javid said: “Small businesses are Britain’s engine room and the success of our whole economy is built on the hard work and determination of the people who run and work for them.

“As business secretary I will always back them and, in my determination to get the job done, one of my first steps will be to bring forward an Enterprise Bill that helps them to succeed and create jobs.

“As part of our long-term economic plan, we will sweep away burdensome red tape, get heavy-handed regulators off firms’ backs and create a Small Business Conciliation Service to help resolve disputes.”

Charles Wilson, CEO of debt recovery law firm Lovetts, said just 1 per cent of the debts they dealt with were disputed, so a conciliation service “is not really addressing the problem”.

“Javid needs to focus his efforts on persuading late paying businesses that it is in their economic interests to pay on time. Late payers rely on the reluctance of their suppliers to take firm action against them.

“The government needs to help small businesses to use the tools and late payment law already available to them to claim late payment compensation and interest.”

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