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Prompt payment for businesses
19/06/2009
A new clause is to be used in Scottish Government contracts to require payment within 30 days to all businesses in the supply chain, particularly small businesses.
Today's Business in the Parliament conference was told of the new contract provision which will also be imposed on Government sub-contractors.
First Minister Alex Salmond said:
"We have been talking to small companies and with the main business organisations and they have serious and understandable concerns over late payment of invoices.
"The Scottish Government is already committed to efficient payment and 92 per cent of all our bills are being paid within 10 days, which compares favourably to other UK Government departments.
"However, we knew we had to go further which is why we are introducing this clause. Small companies working on public sector projects of all kinds will know that they will be paid promptly.
"The effect of late payment on small businesses, particularly in the current economic climate, is completely unacceptable and must be stopped. The Scottish Government is leading by example and I would encourage all other organisations to follow suit.
"This new clause will encourage good payment practice right down the supply chain. Again, the Scottish Government has listened to the needs of business then acted."
Andy Willox, the Federation of Small Businesses' Scottish Policy Convener, said:
"We are delighted that the Scottish Government has listened to our concerns and is taking this swift action.
"Small firms working on public projects deserve to get paid as promptly as their larger counterparts - ensuring that they do so could lift business survival rates and give Scotland's small business community a welcome boost in trading the country out of the current downturn."