New scheme in place to aid Surrey SMEs
A new scheme is being launched by Surrey County Council in order to help smaller companies avoid cash-flow problems.
The new initiative – which has been backed by the Federation of Small Businesses (FSB) – means that bigger firms securing new council contracts will now have to pay suppliers within 30 days of being billed, matching the payment terms that they currently enjoy.
Checks will be done as part of regular reviews, and any company found to be late in paying their suppliers could have their council contracts cancelled.
Some of the county council’s major contractors are able to take far longer to settle invoices received from small and medium sized companies. Currently, there are around 60,000 SMEs – companies with less than 250 employees – working in Surrey. Between 2011 and 2012, they helped the county’s economy grow by around eight per cent – a figure that far out-stripped performance around the rest of the UK.
Stuart Shorttle – the policy chairman for FSB Surrey – welcomed the initiate of the council, saying:
“This announcement is a really positive step in the right direction to meet the aims of our members and other local SMEs wishing to actively pursue contracts with Surrey County Council.”
He welcomed the opportunity to engage more actively with the county council to ensure that members could work towards a more secure financial future for their companies.
Denise Le Gal, the Surrey County Council cabinet member for business services, said:
“Businesses are the lifeblood of every community and we must make sure we create the conditions they need to thrive.
“Long waits and late payments can place a huge strain on smaller businesses as the flow of cash dries up, and potentially can leave them struggling to pay their own bills.
“That’s why, as part of the council’s efforts to support economic growth, we’re introducing this scheme to ensure big businesses working for us pay their sub-contractors as quickly as we pay them.”
The one thing to note is that existing contracts for the council are not covered by the scheme. It will only apply to new schemes.