Debt Payment (Hansard, 2 June 1992)

§ Sir Michael Marshall
To ask the Minister of Agriculture, Fisheries and Food what distribution has taken place within his Department and the purchasing organisations for which he 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. Curry
"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 exist and are distributed by Her Majesty's Treasury.
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.

§ Sir Michael Marshall
To ask the Minister of Agriculture, Fisheries and Food what policy guidelines are currently in place within his Department and the purchasing organisations for which he has responsibility in respect of the prompt payment of commercial debt, particularly as it relates to small business suppliers.

§ Mr. Curry
Government Departments, including their executive agencies, are required to pay their bills promptly. The timing of payment should normally be stipulated in Government contracts. Where there is no contractual provision or other understanding, departments should pay within 30 days of receipt of goods/services or the presentation of a valid invoice or similar demand for payment, whichever is the later.
To help encourage prompt payment of bills by Government contractors to their subcontractors all Government contracts are to 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 should be to pay the subcontractor within 30 days of receipt of a valid invoice or similar demand for payment as defined by the contract.