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Small Business Commissioner Consultation - RMI Member Questionnaire Responses

Small Business Commissioner Consultation - RMI Member Questionnaire Responses

20 August 2015

At the end of July an email was sent out to all members of the RMI asking them to complete a questionnaire for the Department for Business, Innovation & Skills (BIS) in response to their newly published consultation paper on the creation of a Small Business Commissioner.

The aim of the paper is to discuss the value and worth of establishing a Small Business Commissioner (SBC) to help small businesses resolve supply chain disputes with other larger businesses. The SBC’s main functions will be:

  • Providing information, general advice and signposting
  • Offering mediation to resolve disputes
  • Dealing with complaints

View the full paper: http://bit.ly/1NxBRdp

88% of all RMI respondents were from IGA members, so thank you to everyone who completed the questionnaire. Below are some of the key results and comments, reflecting how our members feel about the proposal, and will form part of the RMI’s submission response.

Overall there was an overwhelming support for the introduction of a SBC, with 82.7% of respondents stating they would use a mediation service to support them when settling disputes with other businesses and 80.8% agreeing that the SBC should offer mediation.


Question 5: Should the Small Business Commissioner (SBC) Focus on…

Payment related issues: 69.9% Supply chain terms: 37.0% Contractual issues: 38.4%
Payment related issues: 69.9% Supply chain terms: 37.0% Contractual issues: 38.4%


There was a clear majority that payment related issues needed to be focused on, with a lot of comments emphasising that cash flow is really important for small businesses:

“Cash flow is what affects a small business most, especially if working for larger national/multinational organisations. Many can’t afford to cash flow a big customer’s account and as such getting better terms for small business would help them remain afloat.”

“...Small companies such as ours are held to ransom by larger companies, whose attitude often is “if you want our business, these are our terms”

“Cash flow is one of the biggest headaches for small businesses.”


Question 7: Do you feel you have been treated unfairly in contract negotiations at any time in the past 2 years?

Yes: 19.0% No: 81.0%
Yes: 19.0% No: 81.0%


Respondents of this service who felt they had been untreated fairly cited fix costs, no contract negotiation and increasing demands as some of the main reasons. Some had not been untreated fairly within the last two years but gave examples of when they had problems previously.

“Some of our sales vehicles are bought on-line and require delivery at extra cost - we were recently asked to sign a disclaimer making us liable for any extra costs that the delivery company might incur. Effectively this left us extremely vulnerable to the possibility of spiralling costs. It seems that they are legally entitled to alter the terms with impunity.”


Question 8: Which of the following do you feel disadvantages small businesses when negotiating contracts?

Differences in scale: 36.7% Unclear contract terms: 21.7% Payment terms: 41.7% Biased relationship in favour of large organisation: 61.7% Other (please specify): 5.0%
Differences in scale: 36.7% Unclear contract terms: 21.7% Payment terms: 41.7% Biased relationship in favour of large organisation: 61.7% Other (please specify): 5.0%


The answers makes it clear that independents do not feel they are being treated fairly, with many selecting multiple answers. One garage stated that they are “too small to be able to make a fuss with large companies”.


Question 15: Would you consider using a mediation service to support you in settling a dispute with another business?

Yes: 82.7% No: 17.3%
Yes: 82.7% No: 17.3%


Members were largely in favour of having a mediation service and commented that it would be “a useful resource” to have.

“It would help small businesses wade through the burden and get on with running their small business”

“It is always a good thing to have this as an option.”

The consultation closed on August 21st. The Government will be considering all views expressed in response to the paper, along with further evidence and consideration of other factors including cost implications to inform their final proposals. They will publish a summary of the views expressed and reasons given for the decisions finally taken, which will update you on when it becomes available.