Clamp down on rogue quangos and late payers

MINISTERS are facing twin demands to crack down on the power of unelected quangos, and also force big firms to pay smaller suppliers in time to help protect small businesses and consumers.

Working with the organisation Open Banking Excellence, the Small Business Commissioner Liz Barclay has revealed that firms are under threat of being put out of business because £23.4billion of invoices have not been paid since January.

Ms Barclay has warned that the late payments are a drain on smaller firms’ cash flow and threaten their “ultimate survival”.

She said: “Small businesses are often in a difficult position and won’t bite the hand that feeds them.yet they need to have confidence that payments will be made promptly and fairly.

“We also need changes in how we approach the governance of payment practices. they need to be much higher up companies’ agendas.

“If how a company pays small suppliers is measured as a way of meeting ESG [environmental, social, and governance] obligations, for example, we could see a cultural shift.

“There is a long road ahead, which is why it’s important to understand the complexity of the elements that make up late payments, and what their root causes are and work towards fixing them.”

Meanwhile, in a hard-hitting report, former Commons Treasury select committee chairman Lordtyrie has pointed out that 20 per cent of the economy is overseen by quangos, despite doubts over whether they are fit for purpose.

Lordtyrie himself was chairman of one quango, the Competition & Markets Authority, and is calling for the establishment of a new research body based in and answerable to Parliament, to beef up select committees’ ability to hold quangos to account.

In his report for the Centre for Policy Studies think-tank, Lordtyrie has argued that scrutiny of the Bank of England is particularly important, given the scale of the quantitative easing programme and its wider political implications.

He said: “Quangos play a decisive role in a great deal of public life but their decisions often go unexamined by Parliament.the decisions of many are not subject to enough effective and constructive challenge. Some are slipping, in practice, beyond effective accountability.

“Parliament needs to protect and entrench the operational independence of the most important quangos, such as the Bank of England.

“The Government could do more too. Both Government and Parliament have been understandably distracted by other priorities in the five years since the Brexit referendum.

“So action to investigate, challenge and overhaul the strategic direction of some of these bodies is now long overdue.”