Simon Hart MP, Minister for Implementation at the Cabinet Office in the UK, underlines an aspect of his brief that concerns managing the government’s relationship with our commercial suppliers, with a focus on the importance of prompt payments
The first task for anyone starting a new job is to get to grips with their in-tray. As Minister for implementation, I have got a broad brief: as well as the government’s digital service, property portfolio and cyber resilience work, a core part of my job will be managing the government’s relationship with our commercial suppliers.
And a key element of that is the new prompt payment rules we have brought into force at the start of September. They demand that government outsourcing partners pay 95% of all their invoices within 60 days or risk missing out on major government contracts.
Prompt payment is an issue at the heart of the supply chain, and of crucial importance to the small businesses that form the backbone of our economy. Failure on behalf of government outsourcers to pay settled invoices promptly can threaten the very existence of their smaller suppliers and cause sectors of the economy to stagnate.
I am confident we’ve implemented a workable and pragmatic solution to this decades-old issue. The new rules are a vehicle for behavioural change and a shift in payment culture which will produce long-term results. Rather than impose punitive measures that will do little to improve the delivery of public services, we will work with outsourcing partners to try and get them where they need to be.
Outsourcers deliver vital public services, savings for the public purse, create opportunities for smaller suppliers and are a consistent source of innovation. But we need to ensure the health of the whole supply chain and I am determined to look after the wellbeing of small businesses.
That’s why we have clearly set out these new rules. It is now for our outsourcing partners to meet them.