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Local authorities still late on payments

Councils are still failing to pay suppliers quickly enough, research from the Forum of Private Business has suggested.

A national study to determine how long local authorities in England take to pay supplier invoices has shown only marginal improvements in average payment times since 2009.

Despite government targets for councils to pay suppliers within 10 days, an average of 51% of council invoices in 2011/12 were settled within this time, compared to 45% in 2009.

The research was carried out via Freedom of Information requests issued between May and July, and reveals suppliers are now paid, on average, after 17.5 days.

Councils in the North West were found to be the promptest payers, while those in Yorkshire performed worst.

Chief executive of the Forum, Phil Orford, 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’s 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?”

Among the best performing councils were Tonbridge and Malling, paying 97.1% of their invoices in under 10 days, with South Northamptonshire at 96.1% and Waverley at 94.2%.

While Mr Orford praised those councils for prompt payment, he said there are many authorities who could learn from their example.

He added: “We think the results show that while many councils like to boast that they understand the need to pay suppliers quickly, clearly they don’t. What’s more, it is self-evident many don’t 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’s 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.”

This was posted in Bdaily's Members' News section by Tom Keighley .