IT contractors and other independent workers usually have to deal with late payments, and this is one of the reasons why these workers cannot grow and expand their business. With cash flow always an issue, contractors try to keep afloat using any means possible. However, contractors now appear to have a champion in the form of Labour Leader Jeremy Corbyn.
Speaking to the members of the Federation of Small Businesses (FSB), Corbyn said that big firms that delay payments to their contractors and suppliers should not be allowed to bid for projects and contracts in any public sector organisation.
IT Contractors to benefit from proposed prompt payment policy
Labour has new plans to deal with late payments, and it definitely won praise and attention from contractors. Corbyn stated that any big business that is funded by taxpayer money should be forced to have a prompt payment policy in place so that money filters down to smaller contractors and partners in the supply chain.
The FSB appreciated the plans put forth by Corbyn and believes that it is the right step, as each year, 50,000 traders in the UK fail as their payments get delayed. The FSB also stated that bigger organisations should be looking to help smaller businesses by paying them on time instead of trying to delay payments. The FSB feels that to change this practice, the prevalent culture needs to change, and this change should be supported by the top leadership of the country.
FSB Chairman Mike Cherry said that a non-executive director on the board of a large business should be held accountable for delayed payments to suppliers and contractors.
The Government has just made it mandatory for big businesses to reveal the percentage of payments to smaller suppliers and contractors that is settled within 30 days and the amount that is kept unpaid for 60 days or more.
Cherry stated that while this transparency is important, it is not enough to help contractors, and the Government should lead by example by making sure that IT contractors and other independent contractors working for the public sector are paid promptly.