Late payers are banned

Public contract blacklist drawn up

FIRMS that pay suppliers late will be blocked from taking on public sector contracts, the Government has vowed.

Ministers will today announce a new initiative to use the Government’s spending clout to ensure more companies settle their debts on time.

From autumn next year, all firms bidding for contracts worth at least £5million a year will need to show they pay 95% of invoices to their suppliers within 60 days.

Failure to do so could mean they are barred from the process.

The move comes several weeks after ministers said the Government itself would pay 90% of undisputed invoices from small and medium-sized businesses within five days.

It coincided with proposals to force big firms to appoint a board member to ensure their small suppliers are paid promptly.

Today’s announcement comes ahead of Small Business Saturday this weekend when people will be encouraged to spend money at local shops and back firms in their communities.

Cabinet Office Minister Oliver Dowden said: “Companies providing crucial services to the public sector, like supporting prisons and delivering road infrastructure projects, must be paid on time.

“From next year, Government contractors are late with supplier payments, they could stop winning public contracts altogether – until they clean up their act.” Martin McTague, policy and advocacy chairman for the Federation of Small Businesses, said: “Cracking down on big businesses supplying to Government, and not paying on time, is a win for small businesses, taxpayers, the wider economy and public services.”