Councils ignore government pressure on late payments

Local authorities have failed to respond to government guidelines to pay suppliers within 10 days, with just 51% of invoices being paid on time in 2011/12, compared to 45% in 2009.

The findings, researched and published by the Forum of Private Business, showed a marginal improvement, indicating that authorities are flouting government guidelines on supplier payments.

Suppliers are now paid, on average, after 17.5 days, an improvement of a mere 0.4 of a day compared with 2009.

The worst-performing councils for payment within ten days was Ashfield Council in Nottinghamshire, which paid a paltry 0.9% of invoices within the timeframe.

But Worcestershire County Council was the slowest payer, taking an average of 65 days to settle. More encouragingly, just eight councils reported an average payment time of over 30 days.

At the opposite end of the spectrum, some councils demonstrated impressive payment performances – Tonbridge and Malling managed to pay 97.1% of its invoices within ten days, while South Northamptonshire came second with 96.1%, and Waverley third with 94.2%.

The study is the second carried out by the Forum of Private Business, which submitted Freedom of Information Act requests to every council in the country between May and July.

FPB chief executive Phil Orford described the findings as "disappointing", while policy officer Robert Downes, told PrintWeek: "Our research quite clearly shows there are two types of local council out there. Those that get the idea of prompt payment to all firms, whatever their size, is vital. These we salute.
 
"Then there are those who don’t give a thought about their many suppliers, for whatever reason, and who have also chosen not to listen to Government guidelines on paying invoices in under ten days. These councils know who they are and must improve their payment processes immediately."

But Downes sounded a note of optimism: "While our research has shown plenty of negatives, we must ultimately though look at the picture, and that is that payment times – however small – are getting shorter, and at least that’s a step in the right direction. It would have been most concerning had times increased."
 
The  Forum of Private Business suggested that councils that pay in exceptionally fast times should be given ‘Beacon Council’ status and work with poor performing authorities.

"That so many have chosen not to adhere to the government request to settle invoices in under ten days suggests maybe that the new business minister, Michael Fallon, needs to apply much more pressure on council pay chiefs than his predecessor," Downes concluded.