Forum of Private Business call for the government to give the new Small Business Commissioner teeth
As the consultation period for the recently announced Small Business Commissioner role closes, the Forum of Private Business highlights that 76% of the adult population believe the government should penalise big businesses who act unfairly towards small firms, and calls on the government to give the Commissioner the teeth to deliver real change.
– Late payment is an issue for 51% of small firms with 19% having to agree to long payment terms.
– 22% of small employers are bullied by larger firms and just 5% would be prepared to talk in confidence.
– 74% of adults in the UK feel big businesses have no concern for the UKs small business owners and 76% felt that the government should penalise big businesses who act unfairly towards small firms.
– The average small business awaits payments of around £32,000 – in comparison cash reserves are around £40,000.
– 82% of Forum members wanted a strengthening of the Prompt Payment Code to be a priority for this government, 46% wanted the government to prioritise third party adjudication on contractual disputes.
Late payment is an issue for 51% of small firms and this has increased since the recession despite the need for paying late reducing. Not only is there a monetary implication to this, £31,901 per business according the latest BACS survey, but it also impacts trust, inhibits supply chain innovation and ultimately costs UK jobs.
Having a professional third party such as the Forum, or the Institute of Credit Management deal with contractual disputes can be effective as the business involved is able to remain anonymous. In a large number of cases, potential entrants to the Forum’s Hall of Shame have claimed the issue was a mistake and have taken remedial action. Others have been happy to deal with the associated bad press and damage to their reputation.
A small business owner himself and chief executive of the Forum of Private Business, Ian Cass, said: “Good relationships with clients is absolutely essential to a small business and half of those who responded to the Forum survey stated that they would not take action against a ‘big business’ client in the recovery of an overdue debt.
“There was a mood before the election that something needed to be done about the behaviour of large companies with 76% of adults, according to a Comres poll, wanting the government to penalise big businesses who act unfairly towards small businesses.
“Although creating another mechanism for small firms is helpful, there is plenty that the government could do to support business by preventing poor payers from gaining public contracts or by supporting a kite mark scheme similar to the one suggested by Arla for the dairy industry.
“The lack of government sanction on the dispute resolution service is extremely disappointing and we feel that forcing large companies to report their average payment times is well overdue. We hope that when the government has considered the input to the consultation they will ensure the Commissioner has the teeth to force through real change”.