There were hopes that there might be a 'name and shame' policy and a strengthening of the 'Prompt Payment Code' to make it compulsory.
The move is especially disappointing for small firms as it comes only three months after the Business and Enterprise Minister, Michael Fallon, announced in the media that he was 'going to war' on the issue of late payments after hearing complaints from small and medium-sized businesses.
Chris Bryce, CEO of freelancer group PCG said: “Freelancers are the smallest businesses operating in the UK and as a result are often at the end of the payment chain, making them extremely susceptible to late paying clients. Small companies in Britain are paid 41 days late on average and many freelancers experience far longer delays to income which could end up making the difference between success and failure for their business.
“The way we work in this country is changing. More and more people are choosing to go freelance and we need to embrace, encourage and nurture the flexibility, innovation and enterprise this sector provides.
“Introducing a ‘name and shame’ policy was always going to be challenging, but it is still disappointing to hear that the Government will not be taking more direct action to make the Prompt Payment Code compulsory, or better still, introduce sanctions to the worst offending big businesses.”
The PCG said that the majority of freelancers have no faith in the system and that they think the code is ineffective. They called for the code to be made conmpulsory and and include some form of sanction for the worst offenders if it is to be an efficient deterrent.
Mr Bryce said: We are also calling for a system where small businesses can report offenders anonymously, so freelancers are not compelled to jeopardise important client relationships by sticking their heads above the parapet.
“The issue of late payments is a complex one, but it is clear that there is a pressing need for change in order to ensure we have a level playing field for businesses large and small.”
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Susie Hughes © Shout99 2014