English councils praised by lobby group for paying small firms on time
Analysis of payment practices amongst English councils has concluded that local authorities have continued to pay their suppliers promptly through the recession, although there was a high degree of variation between the fastest and slowest payers.
Analysis of almost 300 FOI responses has concluded that payment terms have, if anything, improved slightly since a similar exercise was undertaken in 2012.
Overall councils took an average of 16.7 days to settle bills, with 92% of suppliers paid within 30 days and 55% paid within 10 days.
Although the proportion of bills paid within 30 days was slightly lower than in 2012 when the figure was 93%, the proportion of bills paid within 10 days increased from 51% and the time taken to settle reduced from 17.6 days.
However there was considerable variation between councils, with Brent settling bills on average in 64 days while others had a policy to pay undisputed invoices on the next weekly run.
South Northamptonshire and Tonbridge and Malling councils were again in the best ten payers for more than one of the indicators, while the worst payer in 2012, Worcester City Council did not respond.
Ian Cass, Managing Director of the Forum stated: “Paying suppliers on time is absolutely crucial to the recovery of the British economy and we are pleased to see that cuts to local government have not dented the professionalism of local authorities in paying their suppliers.”
“Analysis of contract terms shows that 13% of councils offer preferential terms to small and local suppliers as they are keen to nurture their supply chain. While the Forum regularly highlights poor practice through our Hall of Shame, we feel it is extremely important to highlight good payment practice.”
"There are however concerns about how councils deal with disputed invoices, which was outside the scope of this project but Hambleton District Council did include disputed invoices and their average time to settle bills was 3 times the national average. The fact that some other councils are not able to report how many bills are paid in 30 days which may indicate significant operational issues which go beyond failure to talk to the supplier.” concludes Mr Cass.
ENDS
Notes to editors
The details on the performance of local councils within each region are available from the Forum on request. Email thomasp@fpb.org or call 07885 888085 for more information.
Representing thousands of small businesses across the UK the Forum is recognised by the Government as one of the six main business support and lobby groups. It uses this position to influence decision-makers in the UK and Brussels on the issues that matter to small businesses.
The Forum sent 351 Freedom of Information requests on 20th August 2015 and a request to reuse the information was sent out on 6th October. 4 Councils responded after the deadline date and are not included in the analysis.
The FOI request sent to Councils was:
“Please supply me with the details of the standard payment terms your council employs in dealings with its suppliers, contractors and any other party supplying a service or product at a cost to your council.
Please also supply the most recent available figures showing, within a 12-month period:
* The percentage of bills your council settled in 10 days or less;
* The percentage of bills your council settled in 30 days or less;
* The percentage of bills your council took more than 30 days to settle.
Please also supply me with the mean average of the amount of time, in days, your council took to settle bills, within the same 12 month period“
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Media contact for this press release
Thomas Parry
Research Manager
Tel: 01565 626015
Mobile: 07885 888085
Email: thomas.parry@fpb.org