Why we need a Small Business Commissioner
The UK suffers from an unhealthy payment culture, but are things about to change? The launch of a Government consultation today (13 October) points to a potentially bright future.
In business, there’s often a delicate balance involved when it comes to payment. Particularly if you’re self-employed and running a business on your own, you don’t want to alienate clients, but you can’t very well continue without receiving payment for your work.
According to IPSE research almost three quarters of disputes (71%) between self-employed people and their clients are concerned with late payment. Only slightly more than a third (38%) of these were satisfied with the way it was resolved.
Payment issues can have a big impact on cash flow. If you are a one person business and you’re spending time chasing invoices, it’s time you could be spend earning money. But it can also have debilitating effects on businesses. We have heard cases of individuals being unable to cover basic costs of living due to an expectation of payment which didn’t arrive. On top of this, there’s the extra time and added stress involved.
The problem is that people often don’t know how to approach the issue of late payment, and are fearful of losing out on future business. The situation can also involve complex legal implications. If you find yourself banging your head against the wall over this, it would be good to know that there’s somewhere to turn.
It makes a strong case for a Government representative to be appointed. This person, accompanied by a permanent secretariat, should advise on legislation, handle complaints, and potentially name those businesses that abuse the relationship they have with suppliers on a publicly available list. Australia operates such a model which has seen much success since its establishment in 2013, having previously operated at a state level. It works well in Australia, so why not here?
On top of this, as we enter a phase where the UK develops a new role for itself in the world, Government should be clearing a path for businesses. And this Small Business Commissioner role as it was originally called in Australia, would certainly support this.
The good news is it’s something Government is already on its way towards creating. As laid out in the Queen’s speech, the Small Business Commissioner should: provide advice; prevent issues from escalating and preserve relationships; ensure there is a balance of power; act as an honest broker; have the power to recommend legislation.
Today (13 October), Government took one step further in the creation of this role by announcing a consultation on how the Small Business Commissioner should handle complaints.
This is a big step forward, and it’s something IPSE has campaigned for since the launch of our manifesto in 2014. After meeting with the Australian Small Business Commissioner and presenting this model to Government, we are very pleased about this progress.
Establishing this role would provide a vital boost to British business, and could be instrumental in positively changing the UK’s business culture for the better. It’s important that whoever is appointed is not simply a face with a name - a celebrity. The small business community is in need of someone with the right expertise.
The role must be gifted the right remit and support, but we can’t wait too long to fill it. In a post-Brexit landscape we should be doing everything we can to support British business.
We very much look forward to seeing how things progress and are pleased to see this move closer towards appointing a UK Small Business Commissioner. At this time, we certainly need one.Late Payments