Councils missing payment targets

27 March 2009

27 March 2009

Just a third of local authorities are offering a 10-day payment promise to small and medium-sized businesses, a new study suggests.

Central government departments have been told to pay suppliers in the shortened timeframe in a bid to help cashflow as the recession bites. Local authorities and other public sector employers have been urged to follow suit.

But a survey by the Civil Engineering Contractors Association found just 34 per cent of 151 local authority respondents had a commitment to pay small and medium-sized enterprises in 10 days.A further 72 per cent said they would pay suppliers within 30 days.

A spokesman said the level of awareness about the problems businesses faced was high but there was still more work to do.

"The results are patchy for something that would really help a lot of suppliers."

An SM poll (19 March) of nine large central government departments suggested most were meeting prompt payment targets. In January, Department for Environment, Food and Rural Affairs and the Home Office both had a 10-day payment rate above 99 per cent.

A British Chambers of Commerce (BCC) survey published in March showed firms were struggling with late payments. Cash-flow remained a serious problem, with 61 per cent of companies affected.


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