New rules will come into force next Autumn to ensure the government only does business with companies who pay their suppliers promptly.

Cabinet Office Minister, Oliver Dowden said: “Companies providing crucial services to the public sector ,like delivering road infrastructure projects, must be paid on time.

“Paying invoices promptly is vital in providing healthy cash flow, particularly for smaller businesses who are the backbone of the UK economy, to help them survive and thrive.

“From next year, if government contractors are late with supplier payments, they could stop winning public contracts altogether – until they clean up their act.”