It’s pretty unnecessary to point out that times are tough at the moment. Whether it’s from the effects of the seemingly endless recession or from the ongoing public and private sector cust, very few people are not feeling some of the pain being inflicted. Of course, freelancers and small business owners are bearing the brunt of the financial fallout. Companies are closing down all the time and all over the country, so for them, every little helps.
To help small businesses the Coalition has unveiling plans for a loan guarantee scheme, and more recently a small business bank. The Government are very clear about the fact that small companies are going to be an integral part to the country’s wider economic recovery. Unfortunately a study carried out by the Forum of Private Business has somewhat poured cold water on the Coalition’s pro-small business credentials.
Councils all over the country have been failing to reach Government-set targets for when they should pay suppliers (with a lot of these suppliers being small businesses). The target was that all payments should be made within 10 days, but only 51% of invoices of the 2011 – 2012 year were paid within this limit, meaning thousands of suppliers were left waiting to get the money they desperately needed.
Some councils were worse than others. For example, West Somerset couldn’t manage to settle even one invoice within ten days. Kensington and Chelsea hit the target 4.6% of the time, while Mid Suffolk reached an underwhelming 7%. Other locales fared no better. The average wait in Worcestershire was 65 days, while in Hammersmith and Fulham it was 54. That is a massively long time, especially consider that is their average.
There was some good news though. A few councils had some fairly impressive records. Tonbridge and Malling managed to sort out their payments within the target 97% of the time and Northamptonshire paid their invoices within four days on average. On average, local authorities are paying their suppliers within 17.5 days.
Despite a few notable exceptions these statistics are clearly very unimpressive. Late payments are the bane of small businesses, especially as some are often struggling to keep afloat. If their cashflow becomes disrupted or impossible to predict, then it could be the thing that sends them under.
The Coalition seems much more intent on shouting about problems and laying out grandiose plans, rather than getting stuck into problems on a smaller level which are just as important. You have to ask – what is the point of a time limit when it is obviously not being enforced properly?
If the government wants business owners to trust them (and this is something the government will want to ensure the success of the small business bank) then they should show they are actually willing to tackle existing problems, rather than rely on big ideas that will come too late for many companies.
Photo by striatic
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