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Gloucestershire Business News

Late payments bill for business all but lost in Brexit noise

Wall-to-wall coverage of yesterday's 'meaningful' Brexit vote meant other business got rather overlooked - including a bill to help firms with late payments.

A ten-minute rule bill presented in the House of Commons may, on another day, have got fuller attention - but at least one Gloucestershire MP had an appetite for more than Brexit.

David Drew, MP for Stroud, gave his backing to a ten minute rule bill calling for payments on Government and public authority contracts to be made through a 'project bank account' system, an attempt to ensure small businesses get paid directly and on time.

The Public Sector Supply Chains (Project Bank Accounts) Bill - was presented in Parliament by Labour MP for Oldham East and Saddleworth, Debbie Abrahams, with cross party support.

Its aims is to set in law the requirement that parties delivering Government and public authority work - from the lead contractor right down the supply chain - receive payment from the same secure 'pot' of money.

David Drew MP said: "It is only right that government and public authority projects should be setting the standard for making sure that supply chains are paid promptly and on time for work done and project bank accounts are one way to ensure this happens.

"Late payment by large businesses is a massive issue across all business sectors leading to billions of pounds being owed to smaller companies for work that has been done.

"When payments take a long time working their way along a supply chain from the contracting government department or public authority there is a risk that the cash could be cut-off at any time because of payer insolvency as happened with Carillion last year."

Rudi Klein, chief executive of Specialist Engineering Contractors' (SEC) Group, which represents the interests of the specialist construction contractors across the UK, is a leading late payments campaigner and advocate of project bank accounts.

Mr Klein said: "Given the precarious financial state of many of the UK's major contractors Debbie Abrahams' bill is now extremely timely and it's great to get support for the idea from David Drew MP

"SMEs in construction supply chains have had to put up with payment abuse over many years and project bank accounts are now acknowledged to be the most effective method of ensuring secure and regular cash flow."

Martin McTague, Federation of Small Businesses, policy and advocacy chairman, said: "The scourge of late payments causes untold misery for thousands of small business owners, their families and their staff.

"Government, as a customer, should setting a good example here by using project bank accounts for major public procurement contracts. At a stroke this would prevent small suppliers going bust through no fault of their own, where a contractor goes bad - as happened with Carillion exactly one year ago.

"It is right and proper that there be cross party support for this bill. The fact is Whitehall simply doesn't use project bank accounts nearly enough - that needs to be fixed."

"Projects that use taxpayers money should be spent to the standard taxpayers expect, not hoarded by prime contractors. MPs that support project bank accounts are standing up for small business."

The bill will implement a recommendation in the report of the Public Accounts Committee on strategic suppliers (24 July 2018) that the Government must extend the use of PBAs

The 'ten minute rule' allows a backbench MP to make his or her case for a new Bill in a speech lasting up to ten minutes. If the MP is successful the Bill is taken to have had its first reading.

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