PCG calls for late payment hotline for contractors

Oct 30, 2013


By Lyndsey Hall 

August 2014 Update: PCG is now IPSE

Professional Contractors’ Group (PCG) has approached the government about setting up an anonymous hotline for contractors to report big businesses who fail to pay in a timely manner. Supporting a recent announcement by government of plans to allow SMEs to name and shame late-paying customers, PCG says the hotline would allow freelancers to speak up against big businesses without risk of being blacklisted for criticising important clients.

The organisation, which represents over twenty one thousand freelancers, said that this would finally acknowledge a key issue for freelancers, who, given their size, may suffer even more acutely than SMEs as a result of late-paying customers, causing a serious cash-flow problem for many individuals.

According to PCG director of policy and public affairs, Simon McVicker: “Any move that helps to tackle the issue of late payment is welcome – but the Government need to think carefully about how this new plan will work.

“Freelancers are a crucial component of the small business sector and being seen to complain about customers could have negative consequences. Anything that puts the prospect of future contracts and recommendations in jeopardy would be disastrous for independent professionals who live or die by the strength of their client relationships.

“The last thing we want to see is blacklisting of those micro businesses who are brave enough to speak up when big businesses do not pay within a reasonable time frame.”

In November last year, Michael Fallon, Minister of Business and Enterprise, asked companies to sign up to the Prompt Payment Code, a voluntary agreement, set up the Institute of Credit Management (ICM) on behalf of the Department for Business Innovation and Skills (BIS), which allows signatories to promise to pay suppliers on time. More than 1,000 businesses have now agreed to take part, however, according to the Financial Times this is still only a small fraction of the UK’s total businesses.

Business secretary Vince Cable also suggested over the summer that fines could be imposed on late-paying companies – a proposal that has been carried through in the current BIS consultation document.

What do you think about the proposed hotline? Are you a freelancer or contractor who has suffered at the hands of late-paying businesses in the past? Let us know your opinion in the Comments.

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