THE EVIDENCE
On these pages you can find further explanation and links to press articles that give the background to the relationship between SMEs, the government and the major outsourcing companies with respect to the procurement of goods and services
Civil Service Learning
Francis Maude, the Cabinet Office Minister, admits that the way CSL is being run is "not acceptable".
The contract is currently under review by the National Audit Office to investigate claims that Capita paid late, undermined small businesses by directly hiring their contractors, took excessive fees for administering contracts and required suppliers to sign contracts with restrictive terms that prevented them from competing.
The far larger Contingent Labour One (CL1) also contains restrictive terms and is being reviewed by Whitehall officials
The CSL SME Consortium and the CL One Action Group have retained the services of top competition lawyer Mark Brealey QC.
The consortia have filed a complaint with the Competition and Markets Authority
http://www.businesswire.com/news/home/20150304006201/en#.VPhO8mSsW4I
Late payment is a major issue for SMEs
"The government believes a culture of late payment is preventing UK businesses, especially SMEs, from investing in growth and fully contributing to economic recovery. SMEs generate half of the annual turnover of UK businesses, but they often lack access to credit and may get into financial difficulties because of late payment by customers: a survey in 2014 suggested that late payment was a major factor in 1 in 5 UK corporate insolvencies."
National Audit Office, Paying Government suppliers on time, 8 January 2015
http://www.nao.org.uk/wp-content/uploads/2015/01/Paying-government-suppliers-on-time.pdf
The reality, however, according to the NAO report is that companies at the top of government supply chains should receive payment within 5 working days but there is little pressure for them to release that cash to pay their own suppliers on time.
30 days maximum time is allowed for main contractors on government contracts to pay their subcontractors but none of the of four departments the NAO looked at monitor their suppliers’ compliance with this contractual requirement to pay subcontractors.
The worst offender is the Cabinet Office itself, which manages to pay 80% of paper invoices in 7 weeks, compared witha target of 5 days.
http://www.channel4.com/news/fsb-small-businesses-late-payment-culture-video