The government is getting serious about late payment and wants to help small businesses in the UK claw back some of the substantial sums they are owed.

The Enterprise Bill, announced in the Queen’s Speech in June and published yesterday, includes the creation of a new post of Small Business Commissioner. But although the Bill contains a very broad set of measures to help fulfil the government’s stated ambition of making the UK ‘the best place to start and grow a business’, the commissioner’s role will focus heavily on the single issue of late payment.

Announcing the Bill, Anna Soubry, Minister for Small Business, Industry and Enterprise, put the creation of the new commissioner and the focus on late payment top of her list when laying out the ways in which the government hopes the new regime will transform the landscape for small and medium enterprises.

Drawing on statistics from the BACS payment system, the government has stated that as many as a quarter of small firms are at risk of insolvency as a result.

But despite the profile the government are giving to the new commissioner’s role, it remains to be seen just how big a stick he or she will be able to wave at potential offenders or how successful the new role will be in bringing about a business culture in which prompt payment is available to all.

The minister said that the commissioner will be able to ‘investigate’ problems reported by small firms and ‘signpost’ businesses in the direction of mediation services that she hopes will sort issues out more quickly and cheaply than going all the way to court. Soubry added that it was not the government’s intention to ‘name and shame’ late payers but, rather, to get things sorted out quickly and with a minimum of fuss. She hopes that a phone call from the commissioner might be all it takes to get a CEO to whip out the cheque book.

With the number of small businesses in the UK running at a record high, the government sees the sector as a key plank in building sustainable economic growth. Alongside efforts to improve access to capital from banks and other sources, the government clearly believes that getting paid promptly for the goods and services they provide is every bit as important to small firms.

Read our recent blog: Oxygen responds to small business commissioner consultation.