MP secures ten minute rule bill promoting ‘project bank accounts’ to tackle late payments

Late payments campaigner, and MP for Oldham East and Saddleworth, Debbie Abrahams, has secured a ten minute rule bill which says that all payments on government and public authority contracts should be made through a ‘project bank account’ system ensuring small businesses are paid directly and promptly, whilst also protecting them against losses, such as seen with Carillion’s collapse.

The bill, which is titled: Public Sector Supply Chains (Project Bank Accounts) Bill will be heard on 15th January 2019 and aims to set in law the requirement that all parties delivering government and public authority work – from the lead contractor right down the supply chain – will receive payment from the same secure ‘pot’ of money.

Before Christmas Debbie challenged the Chancellor, Phillip Hammond, to support her bill to help end late payments and protect small business suppliers from collapses like Carillion*. Mr Hammond replied saying it was ‘an interesting idea and that the Cabinet Office commercial secretariat is looking at her proposals’. Since then Debbie has been in contact with both the Cabinet Office and business ministers in order to secure the Government’s support for her bill.

Debbie, who created the award winning Be Fair – Pay on Time campaign in 2012, said: “Late payment by large businesses is a massive issue across all business sectors leading to billions of pounds being owed to smaller companies for work that has been done.

“When payments take a long time working their way along a supply chain from the contracting authority there is a risk that the cash could be cut-off at any time because of payer insolvency.

“We witnessed the catastrophic effect this has with the collapse of Carillion, nearly a year ago, with £2bn of unpaid invoices to their smaller suppliers, which included builders in my own constituency. The precarious position of other major Government contractors like Interserve means urgent action is required.

“My ten minute rule bill will require all government and public authority work should be paid to suppliers using project bank accounts.”