Managing Your Cash Flow

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Local authorities ignore Labour’s plea to pay up on time

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Using the Freedom of Information Act, the Forum of Private Business (FPB) asked local authorities across the UK how quickly they pay firms providing them with goods and services.  Overall, the average time local authorities take to pay invoices was almost double the ten-day target, at 19 days. Pretty appalling.

The UK average for the payment of bills within ten days was 42 per cent, but stark regional variations meant that this figure was as high as 52 per cent in some areas, and as low as 11 per cent in others.  “While some local authorities took instant action in response to Lord Mandelson’s calls for ten-day payment a year ago, this research shows that others are completely oblivious to it, even now,” comments FPB’s national chairman Noel Guilford. “Businesses face a payment postcode lottery when carrying out local authority work," he continues. "Some businesses are paid for their goods and services within a few hours but some have to wait more than a month before receiving the money owed to them – it all depends on which council they are working for and where they are in the country.  He adds: “To most business owners, this will seem quite ridiculous – we’re part of a national economy, we’re in a national recession and you would expect a national policy on payment by public bodies. Cash flow is the single biggest concern for many smaller firms. The quicker you pay the money owed to them, the less likely they are to go out of business, with the loss of both jobs and tax receipts.”

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Related articles:How to rescue Britain’s economyCash flow: what you need to know 

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