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CHANCELLOR ACTS TO IMPROVE PAYMENT TERMS AT PUBLIC SECTOR SUPPLIERS

News by Jo Francis
23 November 2023
Business

Policy change: "Some print managers are going to have to change the way they
work"

Jeremy Hunt’s Autumn Statement contained a new policy that could have a
far-reaching – and positive – impact on parts of the industry.

Among the raft of measures introduced yesterday, the chancellor had this to say
about SMEs and the issue of late payment.

In his section about SMEs, Hunt stated: “Next, small business. I ran my own one
for 14 years and have always known that every big business was a small business
once. The Federation of Small Businesses say that the biggest thing I could do
to help their members is end the scourge of late payments. The Procurement Act
we have passed means that the 30-day payment terms which are already set for
public sector contracts will automatically apply throughout the sub-contract
supply chain.

“But from April 2024 I will also introduce a condition that any company bidding
for large government contracts should demonstrate they pay their own invoices
within an average of 55 days, which will reduce progressively to 30 days,” he
stated.

Slow or late payment is an enduring hot topic, and the recent revelation that
marketing services firm ADM Group was implementing standard payment terms of a
whopping 180 days has further ignited the debate in the printing industry.

A number of large marketing services and print management businesses currently
hold public sector contracts that involve the print supply chain, although far
as Printweek can ascertain, ADM is not one of them.

While the public sector element of these contracts is already subject to the
30-day payment terms requirement, it is not necessarily the case that the same
terms apply across the whole business.

APS Global, which won the tender to run the Print Marketplace platform for the
Crown Commercial Service, pays on 30 days for the public sector part of its
operation. Printweek understands that standard terms at the wider group are 60
days.

Marketing services giant HH Global is an awarded supplier on a number of large
public sector contracts, including the giant £420m Crown Commercial Service
print management contract. Outside of the 30-day requirement, its standard
payment terms are currently 90 days.

Sources told Printweek that standard terms at Williams Lea, which owns TSO
(formerly The Stationery Office) were 60 days, while Paragon operated on 30 or
60 days.

Bicester-based Webmart, which paid its suppliers on seven day terms during the
pandemic to help its supplier base cope with the crisis, operates on standard
terms of 30 days end of month and will also make early payment for a discount.
It is an awarded supplier on a number of public sector contracts.

Founder and executive chairman Simon Biltcliffe told Printweek: “Some print
managers are going to have to change the way they work, both in how they deal
with clients and suppliers.

“Often they are agreeing extended terms to win new clients (or keep existing
ones) and then passing these long, or even longer ones, down the supply chain.”

IPIA general manager Brendan Perring noted that Hunt’s measures would need to
have teeth.

“That’s a positive. But the reality is: how are you going to police it?” he
said.

“It’s all well and good to say ‘we’re going to do this’, but how are you
actually going to force people to pay, what’s the mechanism, what are the
penalties? It’s only a benefit to printers if there is any actual structure
behind it.

“If the government is able to produce a formal structure that has teeth and is
able to enforce 30-day payment terms, that would be a benefit.”

Business Print buying Finance Printers
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VIEW COMMENTS FOR: IPIA URGES CHANCELLOR TO HEED CALLS FOR BUSINESS SUPPORT

"The Pensions Regulator and Pensions Ombudsman are toothless for the likes of a
small group of employees. It took the Ombudsman over two years to advise that as
my previous employer entered into a CVA..."


VIEW COMMENTS FOR: WORKERS LEFT IN LIMBO AT PFI SUBSIDIARY

"Great news for the Cestrian staff and hopefully they all transfer over and stay
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left wondering what’s going on at..."


VIEW COMMENTS FOR: WORKERS LEFT IN LIMBO AT PFI SUBSIDIARY


HAVE YOUR SAY IN THE PRINTWEEK POLL

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