The late payments watchdog set up to bite companies that are late paying small businesses has clawed back less than £800,000 since June 2021.
Prior to that, the Birmingham-based Office of the Small Business Commissioner had recovered £7.8 million in overdue payments since it was established in December 2017.
The late payments watchdog was launched to police fair payment practices for Britain’s small businesses and support them in resolving late payment disputes with larger companies.
Late payment could close one in ten small businesses – 8% of small businesses face going out of business in 2022 because of late payment by clients, says latest FSB survey of small firms
A spokesman for the commissioner told The Times that the reason for the discrepancy was that, in the early days, there were some very big outstanding payments resoveled and that smaller firms were asking for help to recover smaller amounts.
Small Business contacted the Office of the Small Business Commissioner for comment.
Terry Corby, chief executive of campaign group Good Business Pays, supported the work of the commissioner and said its role needs to be beefed up.
“The role and remit of the commissioner needs changing,” told The Times. “Big business has learnt that late payment and non-compliance has no consequences. The reporting regulations need beefing up, as does compliance, and the commissioner needs the remit and resources to back that up.”
The Government is to report on the role of the future role of the commmissioner and review payment rules in the coming weeks.
Business secretary Kemi Badenoch said last week that the Government was “listening” to small businesses about late payments. Opening the new Federation of Small Businesses offices in Westminster, Ms Badenoch said: “We know how essential cashflow is for all of you and what happens when that is impacted … It’s not an easy problem to solve but we need to do what we can to make sure we have your back on this issue.”
One issue has been the failure of “duty to report” legislation, which forces large compenies to record how they take to pay suppliers. The number of responses from large businesses to the Government database which stores submissions has dropped every year since 2019.
More on late payments
Small businesses spend hour and a half each day chasing late payments – UK SMEs are owed more than £50bn of late payments between them as big companies put off settling invoices