Could the UK be world leader in prompt payment?
This week we hosted a workshop to discuss the findings of a State Of The Art (SOTA) Review carried out by Enterprise Research Centre on the UK’s place in the world when it comes to prompt payment for small firms. The research is being updated based on points made in the session but it won’t change the fundamentals of the paper which places the UK in pole position to lead the world in payment practices.
In the report’s own words:
‘Internationally, the proposed framework positions the UK at the global frontier of late payment regulation: not by designing the most legally ambitious instrument, but by combining the right elements – automatic obligations, proactive enforcement, accessible adjudication, and supply chain transparency.’
The report was co-authored by Dr Rita Nana-Cheraa and Professor Mark Hart. They look at international examples of good practice, where countries are shown to have positively impacted payment terms and times. Two stand-out countries are Japan and the Netherlands, and I’m in contact with both to learn lessons, and hopefully start an international coalition that shares experience and metrics.
Attending this week’s workshop were representatives from Fair Payment Code awardees, banks, technology providers, policy makers, accounting bodies and small business representative organisations from the UK & EU. The general consensus was that the UK is moving in the right direction with legislation making its way through Parliament that places mandatory obligations on companies to contract and pay fairly, and we need to ensure the Office of the Small Business Commissioner is sufficiently resourced to bring legislation to life and deliver the full culture change we want to see which is where paying on time (within 60 days) simply becomes the norm.
If this can be achieved, it will position the UK as a leader in this field; a country that has not only legislated for 60 day payments and mandatory interest, but that has also set up an enforcement body to oversee good practice, made available adjudication for small firms, whilst making it clear that bad practice won’t be overlooked, with fines applied and made public.
There is still much to do but this review presents the case for the UK to seize world leading position on an issue that has afflicted small firms for too long.
Thank you to all who attended the workshop, to the Department for Business & Trade for commissioning the research, and the Enterprise Research Centre (UK) team who produced it. Full and final review will be produced at the end of this month and I will share a link here.
Emma