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Mystery Shopper scheme helps SMEs with prompt payment

Wednesday August 1st, 2012

Minister for the Cabinet Office, Francis Maude, has announced that the latest ‘Mystery Shopper’ exercise revealed three new cases where payment issues for SMEs have been successfully resolved.

The cases have been published as part of the Cabinet Office’s SME Mystery Shopper scheme, which allows the Cabinet Office to investigate procurement issues on behalf of SMEs and recommend improvements to the procurement process. The results of these investigations are then published online to promote best practice across the whole of the public sector.

The successes involving payment are:

  • An SME working on a contract for NHS North West London hospitals which raised concerns about payment made purely on a ‘contingency fee’ basis. The Cabinet Office intervened and the NHS trust has since reviewed its approach and plans to introduce a new fee system where contingency fees play a smaller role.
  • Despite HMRC paying its prime contractor on time, a small business in the supply chain complained that this wasn’t being passed down. Mr Maude wrote to the local MP warning that the case would be referred to the Mystery Shopper. The prime contractor subsequently agreed to pay the SME more promptly.
  • An SME sub-contractor complained that money was not being passed on promptly by the prime contractor in a Ministry of Defence contract. The Mystery Shopper team worked with the MOD to ensure that overdue payments were made and their processes were strengthened. There is now an improved process in place that will ensure faster payment to defence contractors of all sizes in the future.

Mr Maude said: “SMEs are crucial to the future of this country and to building a more diverse and rigorous economy. Timely access to cash is critical for these businesses. It is already a condition of every government contract that sub-contractors are paid within 30 days and we want to know where money is not passed down the supply chain, whatever the reason.”

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