FSB in Scotland welcomes moves to change payment culture

Following years of FSB campaigning, ministers have proposed a swathe of new powers for the Small Business Commissioner to tackle late payments, including the capacity to fine or introduce binding payment plans for the worst payers.

Further, Company Boards will now be held accountable for payment performance to small businesses, with measures forcing Audit Committees to report payment practices in company annual reports.

The FSB suggests that the Scottish Government could build on the outlined measures.

Andrew McRae, FSB’s Scotland policy chair, said: “Thousands of Scottish businesses close their doors every year due to late payments. That’s why FSB has campaigned long and hard for new action ensure that the biggest businesses step up and start paying their supply chain fairly.

“In time, we would argue that Scotland’s public sector could use the payment practises detailed in a company’s annual report to consider whether they should be awarded public contracts.

“FSB believes that today’s measures could be the catalyst that changes our lamentable payment culture. It must no longer be acceptable for big businesses to use their suppliers as a free source of credit.”

Four in five (84 per cent) UK smaller businesses in supply chains say that they’ve been paid late, according to FSB research, while a third (33 per cent) say at least a quarter of payments they’re owed arrive later than agreed. FSB survey work also suggests that about one in three (36 per cent) Scottish businesses have run into cash flow difficulties as a result of late payments.