Two of the region’s most significant business membership organisations have given their backing to The Journal’s Pay Fair campaign.
Both the Entrepreneurs’ Forum and the North East Chamber of Commerce have spoken out in support our drive to get firms in the region to make prompt payments to businesses in their supply chains a matter of priority.
According to the CBI, UK firms – many of them SMEs that have provided goods or services to larger corporations – are owed in the region of £30bn as a result of late payments.
Through the campaign, we are asking companies of all sizes to help tackle the issue by signing up to the North East Institute of Business Ethics, established last May by managing director of Bridge Club Ltd Caroline Theobald and the Reverend Glyn Evans of St Andrews Church, Newcastle.
Specifically, The Journal is urging firms to sign NIBE’s Business Ethics Pledge, thereby agreeing to join with others to discuss the role and value of business ethics and to work with each other to transform their working environments into places where ethics and community involvement are part of the everyday activity.
The Entrepreneurs Forum was founded in 2002 by leading business figures from the region to provide inspiration and a helping hand to others.
Today, it has over 300 member companies who employ more than 34,000 people between them.
Chairman Nigel Mills said: “It is great to see The Journal once more supporting the region’s business community with the Pay Fair campaign.
“Cashflow is a big issue for many smaller enterprises which, collectively, are a real driving force for employment and economic growth, and form the supply chains of regional industry. “In our most recent Business Tracker Survey of North East entrepreneurs, cash flow was one of the leading challenges our members faced.
“The viability of any supply chain is endangered by slow payment, so it is in the interests of all businesses, whatever their size, to act in a way which supports the values of this campaign.”
NECC, meanwhile, is the largest business membership organisation in the region, representing around 4,000 business and over a third of the region’s workforce.
It aims to be an SME champion within the North East, working with small and medium-sized business across all sectors, ranging from start-ups to established businesses.
NECC policy advisor Rachel Travis said: “Prompt payment is vital to businesses and supply chains. Without quick and effective action, the severe administrative and financial burdens late payment places upon businesses will slow investment, employment and damage economic growth.
“There are North East firms taking the lead on challenging late payment and recognising that paying suppliers on time is a competitive advantage. The Government and the public sector more widely should recognise the contribution these companies can make to the prompt payment agenda.”
She pointed out that figures released by the Department for Business, Innovation and Skills in 2013 showed 85% of small businesses have experienced late payment in the last two years, adding: “The Government’s commitment to push the prompt payment agenda is welcome, but more must be done for businesses to experience real benefit on the ground.
“The cash flow problems created by late payment are often exacerbated by the difficulties businesses have in accessing finance. Banks and regulators must ensure that cost-effective credit facilities are in place, available on reasonable terms and are visible to businesses.”