Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the Cabinet Office:
To ask Her Majesty's Government what is their assessment of the impact of small and medium-sized enterprises assigning their rights to pursue late payment claims against public authorities for statutory interest and compensation.
Answered by Lord Young of Cookham
The Government understands the importance of prompt, fair and effective payment in all businesses, especially small and medium-sized enterprises (SMEs) who may not have the cash reserves of larger companies.
Suppliers can claim statutory interest where a public sector buyer has not paid an undisputed and valid invoice within the contractual payment terms, where the contract does not otherwise provide for the payment of interest.
Statutory guidance for public sector buyers and suppliers on paying undisputed, valid invoices within 30 days down the public sector supply chain came into force on 26 February 2015. Public sector buyers must include 30 day payment terms in all public contracts and must ensure that their prime contractor includes equivalent 30 day payment terms in any subcontracts through the supply chain.
The Government encourages businesses to report poor payment practice and instances of late payment in public sector contracts in breach of contract terms, including late payment in the supply chain, to its Mystery Shopper service.
Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the Cabinet Office:
To ask Her Majesty's Government what is their assessment of the impact on small and medium-sized enterprises (SMEs) of the requirement to pursue claims against public authorities in the courts in order to claim statutory interest and compensation; and what plans they have to improve access to interest and compensation owed to SMEs by public authorities due to late payment.
Answered by Lord Young of Cookham
The Government understands the importance of prompt, fair and effective payment in all businesses, especially small and medium-sized enterprises (SMEs) who may not have the cash reserves of larger companies.
Suppliers can claim statutory interest where a public sector buyer has not paid an undisputed and valid invoice within the contractual payment terms, where the contract does not otherwise provide for the payment of interest.
Statutory guidance for public sector buyers and suppliers on paying undisputed, valid invoices within 30 days down the public sector supply chain came into force on 26 February 2015. Public sector buyers must include 30 day payment terms in all public contracts and must ensure that their prime contractor includes equivalent 30 day payment terms in any subcontracts through the supply chain.
The Government encourages businesses to report poor payment practice and instances of late payment in public sector contracts in breach of contract terms, including late payment in the supply chain, to its Mystery Shopper service.
Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the Cabinet Office:
To ask Her Majesty's Government what automatic entitlement they provide to suppliers in the event of late payment by a public authority; and what process they follow to ensure that (1) interest, and (2) compensation claimed is paid without the need for a reminder.
Answered by Lord Young of Cookham
The Public Contract Regulations 2015 require all contracting authorities to include 30 day payment terms in all public contracts and to ensure these payment terms are passed down the supply chain.
Interest for late payment will be payable according to the terms of the particular contract or, in the absence of any express terms, for contracts for the commercial supply of goods and services, as provided for in the late payment legislation. Under the Late Payment of Commercial Debts (Interest) Act 1998, suppliers under such contracts are entitled to statutory interest, and debt recovery costs, on unpaid invoices.
Where instances of late payment occur in public sector contracts, suppliers are encouraged to contact the government’s Mystery Shopper service.
Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the Cabinet Office:
To ask Her Majesty's Government what is the process by which commercial suppliers can claim statutory interest on overdue invoices owed by public authorities, as provided for by the Late Payment of Commercial Debts (Interest) Act 1998; and what guidance is available to such suppliers regarding their right to claim interest on overdue invoices.
Answered by Lord Young of Cookham
Regulation 113 of the Public Contract Regulations requires all contracting authorities to pay undisputed invoices within 30 days and ensure this payment term is passed down the supply chain.
Where undisputed invoices are not paid within 30 days, interest becomes payable as set out in the late payment legislation. Under the Late Payment of Commercial Debts (Interest) Act 1998, suppliers can claim statutory interest, and debt recovery costs, on invoices not paid within the agreed period.
The Department for Business, Energy & Industrial Strategy have published a user guide on the late payment directive and a copy is attached.
Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the Cabinet Office:
To ask Her Majesty's Government how many public authorities have published their performance online in relation to their duty to pay invoices from suppliers within 30 days as required by section 113(7) of the Public Contracts Regulations 2015 (SI 2015/102).
Answered by Lord Young of Cookham
This information is not held centrally.
Under the Public Contracts Regulations, it is the responsibility of public sector buyers to publish annually the amount of interest paid to suppliers due to late payment. Additionally, central government departments publish interest liable, under the late payment legislation, on a quarterly basis. From March 2017, it has been a requirement for public sector buyers to publish the total amount of interest that they were liable to pay.
The Public Contracts Regulations require public bodies to publish on the internet each year statistics showing how they have complied with the obligation to pay undisputed invoices within 30 days to their first tier suppliers/prime contractors.
We encourage businesses to report instances where this is not happening to the Mystery Shopper service. Mystery Shopper will then investigate.
Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the Cabinet Office:
To ask Her Majesty's Government how many commercial suppliers (1) claimed, and (2) received, statutory interest from public sector bodies due to late payment of commercial debts in each year since 2010.
Answered by Lord Young of Cookham
This information is not held centrally.
Under the Public Contracts Regulations, it is the responsibility of public sector buyers to publish annually the amount of interest paid to suppliers due to late payment. Additionally, central government departments publish interest liable, under the late payment legislation, on a quarterly basis. From March 2017, it has been a requirement for public sector buyers to publish the total amount of interest that they were liable to pay.
The Public Contracts Regulations require public bodies to publish on the internet each year statistics showing how they have complied with the obligation to pay undisputed invoices within 30 days to their first tier suppliers/prime contractors.
We encourage businesses to report instances where this is not happening to the Mystery Shopper service. Mystery Shopper will then investigate.
Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the Cabinet Office:
To ask Her Majesty's Government how much statutory interest was (1) liable to be paid and (2) paid, by public sector bodies to commercial suppliers as a result of invoices paid later than 30 days in each year since 2010.
Answered by Lord Young of Cookham
This information is not held centrally.
Under the Public Contracts Regulations, it is the responsibility of public sector buyers to publish annually the amount of interest paid to suppliers due to late payment. Additionally, central government departments publish interest liable, under the late payment legislation, on a quarterly basis. From March 2017, it has been a requirement for public sector buyers to publish the total amount of interest that they were liable to pay.
The Public Contracts Regulations require public bodies to publish on the internet each year statistics showing how they have complied with the obligation to pay undisputed invoices within 30 days to their first tier suppliers/prime contractors.
We encourage businesses to report instances where this is not happening to the Mystery Shopper service. Mystery Shopper will then investigate.
Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the Cabinet Office:
To ask Her Majesty's Government what sanctions are used in the event of a public authority not complying with the obligation to publish information regarding their late payment performance online as set out in section 113(7) of the Public Contracts Regulations 2015 (SI 2015/102).
Answered by Lord Young of Cookham
Normal public law remedies are available for failure by a contracting authority to comply with the requirement to publish information showing how far it has complied with its obligations to make payment within 30 days under section 113(7) of the Public Contracts Regulations 2015.
The Mystery Shopper service assists in ensuring compliance with obligations under these Regulations, including the requirement to publish information under section 113(7). We encourage businesses to report any instances where this may not be happening to the Service who will then investigate. Contracting authorities must give assistance to any Mystery Shopper investigation and must provide documents or information for the purpose of any such investigation within a set timeframe of 30 days.
Asked by: Lord Mendelsohn (Labour - Life peer)
Question to the Cabinet Office:
To ask Her Majesty’s Government what impact assessment they conducted on provisions in the Trade Union Bill prohibiting public sector employers from providing a check-off service.
Answered by Lord Bridges of Headley
The prohibition on deduction of union subscriptions from wages in the public sector (check-off) is being considered in an impact assessment to be published in due course.