Additionally, the source added while there’s no “silver bullet solution” to the problems currently faced by hospitality businesses, including a decline in discretionary spending and soaring energy costs, the Government is “keen to hear from those impacted” to find much needed solutions.
This comes as business secretary Grant Shapps announced the Payment and Cash Flow Review, tasked with scrutinising existing payment practices to tackle late payments and cash flow problems for small businesses, last week (Saturday 3 December).
Shapps said: “The UK’s 5.5m small businesses are an integral part not just of our economy, but of our communities too, and this Government is firmly on their side.
Unshackling small businesses
“That many small firms are routinely paid late is intolerable and presents a real barrier to productivity, the creation of high-skilled jobs and ultimately economic growth.
“This review will allow us to build on the success we have had so far in curbing late payment, unshackling small businesses from this exploitative practice and creating a system that is fit for the future.”
Moreover, the Government estimated more than £23.4bn is currently owed in outstanding invoices to UK businesses, prompting Shapps to “remind big businesses of their duty to ensure smaller suppliers are paid promptly”.
The review will consider the role of technology-enabled accountancy platforms in tackling late payments as well as how banks and lenders can help small businesses manage their cashflow and identify barriers to access finance.
Furthermore, the review will also include a consultation on the payment reporting regulations, setting out specific proposals on renewal and improvement on these duties.
This follows the Procurement Bill, which is currently being debated in Parliament, aimed to set out a legislative requirement for 30-day payment terms to apply in public sector supply chains in order to help “level the playing field” for SMEs.
Parliamentary Under-Secretary of State for Enterprise, Markets and Small Business Kevin Hollinrake said he was “keen to launch" the Payment and Cash Flow Review and understood the worry late payments can cause.
He said: “I know the joy and freedoms of owning and running your own business, but I also know what it's like to lay awake at night and worry about paying the bills.
“It's a difficult time for small businesses, there’s no doubt, with the economic landscape.
“We've got a real opportunity to boost the wider environment for SMEs and make it easier to start up and scale up; one of the biggest challenges we absolutely know is getting paid on time.”