The rhetoric surrounding the UK’s late payments culture was ramped up another notch this week as an influential Parliamentary committee recommended a mandatory 30-day payment term to stamp out the problem.
Publishing its Small Business and Productivity report, the Business, Energy and Industrial Strategy (BEIS) committee concluded that ‘disgraceful’ behaviour by big firms in particular on payments was seriously hampering output and growth amongst SME suppliers.
It feels like we have been here before somehow. Lots of well-meaning words, a tough-sounding stance… and then what? Rinse and repeat.
The latest announcement from the government on the subject of late payment culture has come in the form of a “call for evidence” from Small Business Minister Kelly Tolhurst specifically on how to end the abuse of SMEs by large corporate clients.
Directors who dissolve companies to write off debts, only to start up near identical businesses shortly after, could be banned and fined under new regulations.
The government has moved to crackdown on so-called ‘phoenix companies’ as part of a raft of changes intended to protect employees and pension holders when companies are shut down.
Retail tycoon Mike Ashley has been quick to position himself as champion of the high street after buying House of Fraser out of administration. But whether suppliers, pension holders and even landlords will be celebrating the takeover is questionable.
The Sports Direct owner snapped up the struggling department chain for £90m just an hour after entered administration last week, vowing to keep open at least 80% of its UK stores open.
The government’s much-vaunted ‘Northern Powerhouse’ may have turned out to be little more than a catchy phrase scribbled down on the back of a Chancellor’s fag packet. But at least contractors and small suppliers operating in the North of England’s biggest cities are more likely than most to get paid on time.
In a survey carried out by FreeAgent, small traders in Manchester reported the lowest rate of late payments nationwide. According to the findings, 86% of invoices issued by freelancers and microbusinesses in the city are paid by the due date - which compares very favourably to the national average of 52%.
More than a quarter of UK businesses have suffered negative consequences from another company becoming insolvent in the past six months.
A survey carried out by R3 revealed that one in 10 businesses have suffered a ‘very negative’ impact from a customer or supplier becoming insolvent since the start of 2018, while another 16% reported a ‘somewhat negative’ effect.
The figures come after a sharp spike in the number of companies being declared insolvent in the first quarter of this year. Led by the high profile collapses of Carillion, Toys R Us and Maplin, the number of insolvency cases rose an alarming 13% from the previous quarter.
The Church of England fears that it could be forced to sell off some of its prized cathedrals in order to stave off bankruptcy - and is seeking to pass news laws to prevent that happening.
At the General Synod of York - the CoE’s equivalent to Parliament - bishops were presented with a report detailing the financial difficulties of diocese including Exeter and Peterborough, both of which are centred around historic cathedrals.
Fears over the future of embattled toy retailer Toys R Us continue to mount after its UK business announced it was to seek a Company Voluntary Arrangement (CVA) to handle a mounting debt crisis.
The company, which is thought to have made a trading loss for seven out of the past eight years, has announced plans to close a minimum of 26 stores in the UK, with a loss of 800 jobs.
Wholesaler Palmer & Harvey has entered administration after failing to restructure significant debts owed to suppliers.
The Palmer & Harvey Group, the UK’s fifth-largest privately owned business and the country’s largest tobacco supplier, had been in takeover talks with Carlyle, the private equity firm.
Latest official figures have confirmed what most people in business already suspected - the UK economy isn’t looking in too great a shape. Growth has stalled to a virtual standstill, just 0.1%, following the worst quarterly performance in five years in the first three months of 2018.
Confidence is low amongst both businesses and consumers, with investment and household spending both down - two factors which, of course, feed one another. In addition, the early months of 2018 have witnessed a succession of big-name company failures, from high street chains like Toys R Us and Maplin, to public sector outsourcing giant Carillion.