Late payment by councils 'a curse' for small firms

14 September 2012

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14 September 2012 | Anna Reynolds

Councils are still failing to meet their mandated target of paying suppliers within 10 days.

Freedom of Information requests submitted by the Forum of Private Business found 51 per cent of local authority invoices from 2011/12 were settled within this time period.

The data revealed only a marginal improvement from the 45 per cent of invoices paid on time when identical research was carried out in 2009. The research reveals suppliers are now paid, on average after 17.5 days, compared with 17.9 in 2009.

Phil Orford, CEO of the Forum of Private Business described the performance by local councils as “poor”.

“In the space of three years we have seen an average improvement of less than half a day in the time it takes local authorities to pay their dues,” he added.

"Late payment is a curse for many small firms, and if local councils can't get it right with all the resources at their disposal, then the private sector will always have an excuse for not doing so either. We must have leadership from the public sector to show how it can and should be done, and government must continue to pile on the pressure in order that they do."

The data pointed to something of a postcode lottery up and down the country for suppliers, with councils in the North West the quickest to pay, while those in Yorkshire suffering the longest delays.

Ashfield District Council in Nottingham paid just 0.9 per cent of invoices within the 10 days. North East Lincolnshire Council and the London Borough of Hammersmith and Fulham were also highlighted as consistently slow payers.

Leicester City Council was in the bottom 10 of those authorities in terms of number of bills paid between 10 and 30 days, although their average speed of 28 days was higher and not among the 10 worst performing authorities. In total, eight councils indicated the average time to settle bills was over 30 days.

On a positive note, Tonbridge and Malling Council paid 97.1 per cent of their invoices in under 10 days. South Northamptonshire Council and Waverley Borough Council also performed well.

Orford advised councils that are underperforming to “re-evaluate their payment systems from the top down” and recommended they learn from authorities that have successfully speeded up their payment plans.

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