UK public bodies sway European Parliament to reject late payment penalties
Slow trade payments are a scourge affecting the cash flows of countless British businesses. Government recognised this problem during the credit crisis, even pledging last year that Government departments would help by paying trade invoices to suppliers of goods and services within 10 days of receipt.
Call me a cynic, but I thought Lord Mandelson’s promise was going to be a tough one to deliver on.
Now I read that a European Commission proposal to impose greater fines on public bodies that pay bills late was defeated in the European Parliament last week- get this- after lobbying by UK local authorities and the NHS!!
The Local Government Association in the UK said that had the proposal gone through, costs could have risen to 600 million GBP as the EC move could have encouraged businesses that don’t impose interest payments on late bills now to start doing so.
LGA improvement board chair David Parsons called the rejection of the proposal ” a victory for common sense”. An NHS director added that the proposal would have placed “unnecessary costs on the health service at a time when budgets are already under pressure”.
So, if you are a small company having difficulty in extracting payment on time from tardy customers, it doesn’t look like you’ll get a sympathetic ear from some public bodies- despite government rhetoric to the contrary.