the business ladder

Although the new European standard of 30 days for payment terms to businesses has now been introduced, the Forum of Private Business (FPB) has called for the public sector to keep the previous standard of 10 days to help small businesses.

The public sector has been urged to stick to its target of paying small firms within 10 days. New legislation was agreed by the European Parliament and European Council amending the EU Late Payments Directive to address the issue of tardy payments throughout Europe.

However, the government announced a UK target of 10 days back in 2008 and the Forum of Private Business (FPB) is calling on it to be maintained. While the lobby group is keen for the public sector in the UK to stick to the 10 day target, it welcomed the recognition that late payments do need to be addressed.

“If approved by the European Parliament, as expected, these new rules under the Late Payments Directive should make significant inroads in tackling the £24bn hole in the UK's economy caused by late payment to small businesses,” said the Forum’s Chief Executive Phil Orford.

“However, although it is still not a widespread success across the public sector, abandoning the UK’s domestic 10 day payment target would be a significant step backwards in tackling the culture of poor payment.

“Central government departments, for example, are largely meeting the 10 day target and it is important that the UK’s public sector continues to strive to set the standard for other countries and private companies to follow.”

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