ECA applauds Chancellor’s 2023 Autumn Statement payment reforms for SMEs

Leading electrotechnical and engineering services body ECA has welcomed Chancellor Jeremy Hunt’s commitment to enhance payment times for SMEs in his Autumn Statement.

From April 2024, companies bidding for large government contracts will need to demonstrate they pay invoices within an average of 55 days, and tapering to 30 days in the coming years, to "end the scourge of late payments," according to the Chancellor’s Statement this week.

The announcement builds on the work ECA has done as an advisor on SME business to the Cabinet Office, where currently if contractors cannot prove they pay 90% of invoices within 60 days, they are likely to be excluded from government contracts.

Rob Driscoll, Chair of the Cabinet Office SME Advisory Payment Group and Director of Legal & Business for ECA, said:

“This is a huge achievement for ECA in levelling up the commercial environment in which our Members operate. It clearly demonstrates liquidity of supply chains and cash-flow are political priorities.

“Over the past 24 months, ECA has worked tirelessly with its Members, payment software providers, industry press, the Construction Leadership Council, the Department for Business and Trade, the Cabinet Office, and an alliance of a dozen trade bodies to underscore the urgent need for reform and elevate SME payment terms within the political agenda.”

ECA has also welcomed Kemi Badenoch’s commitment on behalf of Government to reform payment reporting. This is designed to eradicate loopholes and maintain the credibility of the government's open-source credit information reports on large firm payment performance.

ECA was also successful in influencing the new Procurement Act, which gained Royal Assent last month. Following several meetings with Ministers, peers and MPs, it introduces 30-day payment as a statutory implied term into public sector contracts at tiers 1, 2 and 3 of the supply chain. It ensures that the public sector reports on payment terms in the same way as the private sector.

ECA, which represents nearly 3,000 electrical and engineering services businesses in England, Wales and Northern Ireland, has been a steadfast advocate for improving payment conditions for decades.

This article was issued via Press Release as "ECA applauds Chancellor’s payment reforms for SMEs " dated November 24, 2023.

--ECA

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