The government has unveiled plans to appoint a small business commissioner to tackle payment disputes and unfair practices.
The Department of Business, Innovation and Skills said the commissioner would lead a “culture change” in how small businesses resolve disputes with larger companies.
A new commission would help small businesses handle disputes over late payment and other supply chain practices that hit them hard.
The role would also involve helping small firms to access advice, support, mediation and conciliation services, and have the power to look into complaints and report on its findings.
The department said the plans would deliver the government’s pledge for a small business conciliation service and go further. The measure will be part of the government’s Enterprise Bill which will back business and create jobs.
Small business minister Anna Soubry said: “The government is backing small businesses to grow and create more jobs and opportunity.
“Small businesses are owed £26bn in late payments and spend millions more chasing down money they have already earned through hard work. This is simply unacceptable – it limits their growth and productivity, and can put an otherwise successful business at risk.”
Soubry added: “The commissioner will tackle the imbalance of bargaining power between small suppliers and large customers, and encourage them to get round the table and sort out disputes at a fraction of the cost of going to court.
This latest development is among a number of measures to tackle late payment. The Small Business, Enterprise and Employment Act 2015 introduced a reporting requirement for the UK’s largest companies to report on their payment policies and practices.
The commissioner will be able to use this data to name and shame those behaving badly and celebrate those leading the way by paying promptly.
The government has published a discussion paper on the commissioner’s role and is asking businesses for views on its proposals.
By Marcel LeGouais