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Cabinet Office Stands Up For Prompt Payment For Small & Medium-sized Enterprise

30/07/2012

By Claire West

The latest "Mystery Shopper" cases reveal three new cases where payment issues for SMEs have been successfully resolved, Minister for the Cabinet Office, Francis Maude, announced today.

The cases have been published as part of the Cabinet Office's SME Mystery Shopper scheme, which allows the Cabinet Office to investigate procurement issues on behalf of SMEs and recommend improvements to the procurement process. The results of these investigations are then published online to promote best practice across the whole public sector.

The successes involving payment are:

An SME working on a contract for NHS North West London hospitals which raised concerns about payment made purely on a “contingency fee” basis. This meant payment would take longer than usual and would be made on an erratic basis. As a small business they would not have the resources to wait several months, so contacted Mystery Shopper. The Cabinet Office intervened and the NHS trust has since reviewed its approach and plans to introduce a new fee system where contingency fees play a smaller role.

Despite HMRC paying its prime contractor on time, a small business in the supply chain complained that this wasn’t being passed down. Francis Maude wrote to the local MP warning that the case would be referred to Mystery Shopper. The prime contractor subsequently agreed to pay the SME more promptly.

A SME sub-contractor complained that money was not being passed on promptly by the prime contractor in a Ministry of Defence contract. The Mystery Shopper team worked with the Ministry of Defence to ensure that overdue payments were made and their processes were strengthened. There is now an improved process in place that will ensure faster payment to defence contractors of all sizes in the future.

Minister for the Cabinet Office, Francis Maude, said:

[i]"SMEs are crucial to the future of this country and... continued on page two >

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