PCG, the organisation representing the UK's independent professionals, has voiced its disappointment at today's news that the Government has backed down on its promise to take action on late payments between large and small businesses.
Chris Bryce, CEO of 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."
According to Chris Bryce, freelancers themselves have no faith in the system in its current form:
"Our own research tells us that the majority of freelancers think the code is ineffective. In order to change the culture of late payment in business, the code must be compulsory and include some form of sanction for the worst offenders. 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."