In December 2017 the UK Government appointed a Small Business Commissioner with the remit of supporting SMEs struggling with late and unfair payment practices when dealing with larger businesses.
The Commissioner appointed to tackle this is Paul Uppal, who ran his own small business for 20 years, and it will be his job to support SMEs in taking action on late payments and on making a complaint. There is also a website where SMEs can get help.
Three months after his appointment, however, research by Close Brothers Invoice Finance found that very few SMEs have any confidence that the Commissioner will be able to make a difference. Their report says: “84% of SMEs do not anticipate that the introduction of the small business commissioner will have any positive impact on their business.”
According to Mike Cherry, National Chairman of the Federation of Small Businesses (FSB): “The UK is gripped by a poor payments crisis, over 30% of payments to small businesses are late and the average value of each payment is £6,142. This not only impacts on the small business and the owner, it is damaging the wider economy.”
It has been estimated by the Centre for Economic and Business Research that a group of 22,000 so-called high growth small businesses make a disproportionately large contribution to the economy, providing an estimated £65,000 per worker compared to the national average of £55,000.
However, while very high on the list, ‘late payment’ was not SMEs’ only concern when asked about their issues and prospects for 2018.
According to a survey by chiefexecutive.com, high on the SME list of challenges were firstly recruiting, retaining and developing quality people, followed by managing growth and change (specifically access to and cost of funding) and the Government’s competence, regulation and understanding of business.
In fourth place was managing uncertainty (the wider geo-political and economic context). Other research has found that more than half of SMEs felt that their Brexit concerns were being ignored and that ministers were not listening to their views.
Given that SMEs are seen as the key to improving the UK economy’s growth and productivity plainly they will need as much support as possible.
As the deadline for leaving the EU is less than a year away it is high time that there was serious attention paid to SME voices and that significant and effective steps taken to address them.
The Small Business Commissioner appointment is a start, but he might also take up other causes for small businesses, not least holding banks to account for their dealings with SMEs. There is the prospect of a complaints procedure that avoids the need to deal with issues through the courts. There is also the creeping nature of fees and charges which go unreported in the press, the latest being Lloyds revised fees that for some have in interest rates being increased up to 52% and fees being increased by 240%.
it remains to be seen how effective the new Commissioner will be.