Local authorities shamed over late payments
Forum of Private Business investigation reveals just "marginal" improvements in average payment times since 2009
Local authorities are still unwilling to settle bills with their suppliers on time, according to a Forum of Private Business (FPB) investigation.
This is despite government-imposed targets for councils to pay suppliers within 10 days.
Just 51 per cent of council invoices in the 2011/12 financial year were settled within the agreed timeframe, compared with 45 per cent in 2009. In addition, the research revealed that suppliers were paid, on average, after 17.5 days in 2011/12 – just a fractional improvement on the 17.9 days recorded in 2009.
Research was carried out using Freedom of Information requests between May and July, which also revealed councils in the North West were the quickest payers, with those in Yorkshire being the worst.
Phil Orford, chief executive of the FPB, said: “Despite all the pressure from central government for public bodies to settle bills in less than 10 days, very few councils are coming even close to this target, and that is disappointing. 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. This again is poor. That said, at least the movement is in the right direction, but should we be thrilled at such a small improvement?”
Topping the league of prompt payers were Tonbridge and Malling, which paid 97.1 per cent of its invoices in under 10 days. South Northamptonshire came second on 96.1 per cent, and Waverley third on 94.2 per cent.
The worst-performing council in under 10 days was Ashfield District Council in Notts, with just 0.9 per cent of invoices paid within this timescale.
Overall, the research revealed that just eight councils indicated that the average time taken to settle bills was more than 30 days, with Worcestershire County Council being the slowest payer – taking 65 days on average to settle its bills.
Orford added: “We think the results show that while many councils like to boast that they understand the need to pay suppliers quickly, clearly they do not. What’s more, it is self-evident that many do not appreciate the value of prompt payment to small firms. With some exceptions, local authorities are not making meaningful progress on speeding up their payment practices.
“In a full three years, with the economy bouncing along the bottom the whole time, payment times have improved by an underwhelming 0.4 days on average. That is just not good enough, and really those councils who average longer than 30 days need to re-evaluate their payment systems from the top down. And there are many.
"Late payments are a curse for many small firms, and if local councils cannot 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.”