LATE PAYMENTS VICTIMS: IT’S SUPPLY CHAIN BULLYING

KEN HOUSTON

Occasionally a piece of negative news comes over the airwaves which causes one to be thankful for small mercies.

This was a sensation I experienced last week while listening to a BBC Radio Scotland report on the latest pronouncement by the Federation of Small Businesses on the scandal of late payments, its members, of course, being particular victims.

The FSB describes the phenomenon of excessively-late payments as “supply chain bullying which needs to be stamped out”.

Since launching a PR business 16 years ago I have rarely experienced any seriously late payment issues; only two substantial invoices were never paid and that was because, without warning, the client had the feet taken from under him by a major bank which seemed willing to dissolve a successfully-trading company just to make a miniscule reduction to its giant loan book.

But then again all my clients were themselves small or relatively small businesses, who despite restricted cash flows, seemed to act more honourably than many of our supposed elders and betters in the corporate world or in government.

According to the FSB almost two thirds of Scottish businesses have been paid late in the last year with a similar proportion reporting that the phenomenon is on the increase.

Andy Willox, the FSB’s Scottish policy convenor said: “Many small businesses don’t have the same cash reserves as their larger counterparts. So you can understand why FSB research shows that 44 per cent of members that are paid late are then forced to pay their own suppliers late. Further, fewer flexible credit facilities amplifies the impact down the supply chain.”

The report found that more than a quarter of payments in Scotland are late and firms are waiting on average an additional seven weeks to get money in the bank.

On average, each outstanding payment owed to Scottish firms equates to £5,718.

The FSB has long campaigned on mitigating the damage that late payment does to small and new-start businesses and argues that many of the problems stem from an imbalance of power between large organisations and their much smaller sub-contractors.

Analysis also shows that if Scotland adopted the payment practices of Norway, 2,075 fewer firms would close annually, resulting in an estimated £134m economic boost.

Big business in other countries, including Denmark, Germany and France, also pay smaller suppliers far more quickly than they do in the UK, the FSB claims.

FSB will highlight these figures to the Scottish Government in its budget submission, urging Ministers to put pressure on bigger firms in Scotland.

Mr Willox said: “Tackling this problem will require a change of attitude at the top of private sector. We’re looking for real pressure from Scottish political leaders.”

This puts the ball back in the court of not just corporate Scotland but Holyrood.

So it’s over to Economy Secretary Keith Brown. After all does his leaderene not keep banging on about how ‘European’ we Scots are and sees Scandinavian social-democracies like Norway as a template for an independent Scotland?

 

TIMES PAST

Those who still buy a daily newspaper have responded positively to the recent investment in the Scotland edition of The Times, which now appears to have overtaken The Scotsman in paid-for sales.

That being so there must have been groans at the former’s Glasgow bureau the other week as the result of a double-page article obviously prepared in London as part of the main edition.

It was a follow up to the result in the American election, in which Donald Trump was compared with the US Revolutionary general, and later president, Andrew Jackson.
The piece was illustrated by a painting showing Jackson and his men defeating “the English” at the Battle of New Orleans in 1813, despite the fact the British troops depicted were clearly from a kilted Highland regiment.

Was this the mistake of some wet behind the ears caption-writer, too young and too ‘metropolitan’, to know better?

Well not entirely because the reference to defeating “the English” came directly from the article itself – written by none other than Michael Gove, until the recent change of Prime Minister, a senior cabinet member, born in Edinburgh and raised in Aberdeen, where he began a journalistic career before entering politics.

Ouch! Twice over.

@PropPRMan

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