The government may be contributing to the UK’s company insolvency rate by failing to meet its own targets on late payment, according to R3, the Association of Business Recovery Professionals.
In a letter to the Editor of the Times, R3 president Giles Frampton explains that late payment is a significant factor in company insolvency on a regular basis.
“Late payment is a primary or major factor in around one in five corporate insolvencies,” he writes.
“In 2013-14, almost half of the insolvency practitioners that work on corporate insolvencies reported working on a case where late payment was a major factor.”
Despite the government’s own vocalised commitment to prompt payment, figures from the National Audit Office at the beginning of this year showed poor performance in practice.
Mr Frampton warns that this may be harming the UK economy – in particular at the small-business end, putting the future of otherwise viable firms at risk.
For those that work directly with the government, he adds that prompt payment requires action – and that to do so would be “worth far more than words”.