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Forum of Private Business asks councils how long they take to pay suppliers


31/05/2012

By Daniel Hunter

The Forum of Private Business has this week submitted Freedom of Information Act requests to local councils in England asking how long they take to pay their suppliers.

In 2009, almost a year after the Government urged councils to follow the example of central departments and commit to paying their suppliers within 10 days, FOI research carried out by the Forum revealed a ‘postcode lottery’ for council supplier payments.

Overall, the average time local authorities took to pay invoices was almost double the 10-day target, at 19 days. The UK average for the payment of bills within 10 days was 42%, but stark regional variations meant that this figure was as high as 52% in some areas and as low as 11% in others.

“The real public sector late payment problem is where local authorities are concerned, where a great many contracts for small firms originate,” said the Forum’s Senior Policy Adviser, Phil McCabe.

“According to our previous freedom of information research there has been a real postcode lottery when it comes to suppliers being paid on time — it will be interesting to see if anything has improved or, given that we are again in recession and overall levels of late payment appear to be increasing, become worse.

“While the Government’s commitment to paying promptly centrally is welcome it is important we also look to councils to set the standard for private companies to follow."

The Forum believes that, with public contracts worth some £70 billion, the public procurement process could be used to promote better payment practices, for example by including pre-qualification questionnaires (PQQs) on payment in the tendering process.

Public sector is a poor payer, say one in five firms

More recently, research carried out by the Forum and credit agency Graydon UK found that late payment is most widespread in the private... continued on page two >

 

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