The Forum of Private Business
RELEASE DATE: 19 September 2005
RELEASE TIME: IMMEDIATE
DEFRA faces £40 million late payment bill over foot and mouth
Private businesses are set for an astonishing £40m payout in taxpayers' money after scoring a high court victory over DEFRA.
For the landmark judgement could mean the Government department will be forced to reluctantly pay out millions to a long queue of other contractors still waiting to be paid for disposing of millions of livestock during Britain's foot and mouth epidemic five years ago.
Ironically, the Government department was forced to fork out several million pounds extra as a penalty for delay in payment, under recent legislation which gives a firm a statutory right to interest on a debt.
"We welcome this court judgement as it proves even officials of a Government department cannot get away without paying their debts," said Nick Goulding, chief executive of The Forum of Private Business (FPB) which championed the introduction of Statutory Right to Interest (SRI).
The late payment act was brought in to tackle the major problems many firms face in having to wait excessively long periods for payment of money owed to them for goods or services.
The FPB, which campaigns for the rights of more than 25,000 private firms across the UK, spent four years fighting in support of a number of private contractors kept waiting for payment by DEFRA for work carried out during the foot and mouth outbreak.
Now they achieved a major success in supporting the case of Harry Ruttle plant hire of Chorley, Lancashire. This company took DEFRA to court and won their claim for outstanding debts over £10 million plus costs and interest on what they were owed for digging disposal pits on farms during the foot and mouth outbreak.
DEFRA officials were criticised in the high court judgement for having no real grounds for refusing to pay the bill. And DEFRA will have to pay Ruttles over £1 million for the cost of the lengthy court hearing in London.
"This case was only the tip of the iceberg where DEFRA refused to pay a host of contractors for legitimate work they carried out during the foot and mouth outbreak," said Mr Goulding.
"As a result of the precedent set by this court judgement, we will be encouraging several other contractors we have been supporting to pursue DEFRA for payment , and claim interest at a rate of over 12% for late payment as their statutory right. This will mean DEFRA having to pay out up to another £40 million plus interest."
The Forum of Private Business (FPB) was formed in 1977 and is a pressure group fighting on behalf of private businesses. The FPB represents approximately 25,000 UK-based businesses employing in excess of 600,000 people, and is a powerful lobbying voice in both the UK and the European Union.
The FPB, as the only full UK member of UEAPME - the organisation that represents small and medium-sized enterprises (SMEs) in Europe - is the most prominent advocate of UK SMEs in Brussels and has a track record of positively affecting legislation prior to its introduction in the UK.
The FPB also provides a range of business services aimed at increasing member efficiency and profitability. Visit www.fpb.org
Ben Pinnington, media manager
Tel: 01565 626019
Mobile: 07887 562900
Rex Garratt, press officer
Tel: 01565 634709
Mobile: 07775 756307
Press office fax: 0870 241 9570
FPB, Ruskin Chambers, Drury Lane, Knutsford, Cheshire WA16 6HA