The Cabinet Office has published an updated Procurement Policy Note (PPN) confirming that the prompt payment threshold is going to be increased for suppliers bidding for Government contracts above £5 million per annum.
From 1 April 2022, suppliers will be required to show that they pay 90% of invoices within 60 days and have an action plan in place to achieve the required standard of 95% in future, otherwise they risk being prevented from bidding. Currently a company can still pass if they pay 85% of invoices within 60 days and submit an action plan, and the Cabinet Office is continuing to take a phased approach with the threshold being “ratcheted up over time until it reaches 95%”.
On average, Build UK Contractor members now pay 94% of their invoices within 60 days, and the payment performance table shows the percentage of invoices paid within 60 days for more than 100 of the industry’s largest companies.