§ Sir Michael MarshallTo ask the Secretary of State for Health what policy guidelines are currently in place within her Department and the purchasing organisations for which she has responsibility in respect of the prompt payment of commercial debt, particularly as it relates to small business suppliers.
§ Mr. SackvilleGovernment Departments, including their executive agencies, are required to pay their bills promptly. The timing of payments is stipulated in our standard terms and conditions which form part of all our contracts or purchase orders. These state that unless otherwise agreed in writing by the purchaser, the supplier shall render a separate invoice in respect of each consignment delivered under the order. Payment shall be due 30 days after receipt of the goods or the correct invoice therefore, whichever is the later.
To help encourage prompt payment of bills by Government contractors to their subcontractors, all new 455W Government contracts contain a clause requiring the supplier or contractor to pay its subcontractors promptly. In the absence of normal practice to the contrary for that type of contract or other special circumstances, the commitment shall be to pay the subcontractor within 30 days of receipt of a valid invoice or similar demand for payment as defined by the contract.
§ Sir Michael MarshallTo ask the Secretary of State for Health what distribution has taken place within her Department and the purchasing organisations for which she has responsibility of the Department of Employment's publication "Making the Cash Flow—a Guide to the Payment of Commercial Debt for Buyers and Small Business Suppliers".
§ Mr. Sackville"Making the Cash Flow" was prepared as guidance for the private sector and there was therefore no formal distribution to other Government Departments. Guidelines on purchasing by Government Departments already exists and are enhanced by the Department's own internal purchasing and supply manual.
The Department of Employment has been undertaking a survey of prompt payment record of Government Departments during the financial year 1991–92 and the results of this exercise will be published in the near future by the Department of Trade and Industry, which now has responsibility for small firms' issues, including late payment. After studying these results the Department will consider what further measures, if any, may be necessary to encourage prompt payment by the public sector.