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Mon June 21 2021

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Local authorities exposed for slow payment of invoices

11 Sep 12 A nationwide study to determine how long local authorities in England take to pay supplier invoices has shown just marginal improvements in average payment times since 2009.

Research by the Forum of Private Business shows how long each council takes to pay its suppliers.

The organisation carried out identical research three years ago, yet despite government-imposed targets for councils to pay suppliers within 10 days, on average only 51% of council invoices in the 2011/12 year were settled within this time frame. That compares to 45% in 2009.

Suppliers are now paid, on average, after 17.5 days – a fractional improvement from 2009 when it was 17.9.

The research, carried out using freedom of information requests issued between May and July, reveals wide regional variations, with councils in the northwest the quickest payers, while those in Yorkshire (reinforcing stereotypes) were the worst.

Some councils paid very promptly. Tonbridge & Malling pays 97.1% of invoices within 10 days, South Northamptonshire 96.1% and Waverley 94.2%.

The worst performing council for payment in under 10 days was Ashfield District Council in Nottinghamshire, which pays just 0.9% of invoices within 10 days.

Eight councils indicated that the average time taken to settle bills was more than 30 days, with Worcestershire County Council by far the slowest payer, taking 65 days on average to settle up. Worcestershire reported fairly average response times for the proportion of bills paid within 10 and 30 days indicating that there may be a small number of contracts that were paid very late.

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Leicester was in the bottom 10 for the proportion of bills paid within 10 and 30 days, although the average time taken to settle their bills was 28 days, putting them just outside the bottom 10. North East Lincolnshire and Hammersmith & Fulham were also highlighted as consistently slow payers by the research.

"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," said the Forum's chief executive, Phil Orford.

"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?"

"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."

He added: "While the results have been disappointing, there are some excellent examples of councils paying in exceptionally quick times. We think Northamptonshire's four-day average payment time is exceptional, and suggest that the Local Government Association consider making them a beacon council in prompt payment. There are many authorities who could learn a lot from their example."

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