The UK government has officially kick-started its search for the nation’s inaugural small business commissioner, in a bid to clamp down on late-paying bigger firms that harm the future of smaller businesses.
It’s a position that many small business owners have been waiting on for some time, with the Government announcing plans for a small business commissioner back in 2015 as part of its Enterprise Act.
However, the vacancy for the role has now been published publicly on the Cabinet Office website, making the prospect of a new figurehead more of a reality.
FSB claims that late payment from larger companies is resulting in more than 50,000 businesses going to the wall every year.
Mike Cherry, Chairman of the FSB, has continually led the calls for the Government to publish a timetable for the commissioner’s appointment to give SMEs better clarity.
Cherry also demanded “clarity around formalising the commissioner’s relationship with the Prompt Payment Code and the powers the office has to publicly name and shame those companies that don’t comply”.
The Prompt Payment Code (PPC) sets the overall standard for best practice payments, managed by the Chartered Institute of Credit Management. Over 1,800 businesses put their name to the PPC, committing to the fair and just treatment of service and product suppliers which includes maximum payment terms of 60 days.
However, recent FSB research suggests the majority of small business owners have little confidence in the code being adopted to the letter.
“In order to do this effectively, the Government should ensure the commissioner has sufficient resources to tackle the £26.8 billion owed to smaller businesses across the UK,” added Cherry.
In addition, plans to give bigger businesses a ‘duty to report’ and outline exactly how they pay smaller service providers last April have since been delayed.
The Government eventually published its new reporting guidance for larger businesses last month, with Small Business Minister, Margot James, confirming the regulations in Parliament.
From March 2017, larger firms and limited liability partnerships (LLPs) will be required to submit their payment practice details twice yearly, including the average time taken to pay their suppliers. If they don’t adhere to this they will be eligible for fines and, worse still, criminal proceedings.