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.

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.