Scottish government adds prompt payment clause to contracts

Date: 23rd June 2009

The Scottish government has added a new clause to government contracts stipulating that payments must be made within 30 days to all businesses involved within the supply chain.

The new clause will also apply to all sub-contractors of government work.

The initiative has been brought about after considerable pressure from the Federation of Small Businesses (FSB).

First minister Alex Salmond said: "We have been talking to small companies and with the main business organisations and they have serious and understandable concerns over late payment of invoices."

Mr Salmond went on to highlight the particular danger of late payments for small businesses and gave assurances that late payments would no longer be a problem now that the new clause had been implemented.

He added: "Small companies working on public sector projects of all kinds will know that they will be paid promptly."

Andy Wilcox, the FSB Scottish policy advisor, commented: "We are delighted that the Scottish government has listened to our concerns and is taking this swift action."