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Local government paying promptly despite budget cuts

Analysis of payment practices amongst English councils has found that most local authorities continue to pay promptly, with 92% of suppliers being paid within 30 days. However, there is considerable variation between councils.

Analysis of almost 300 FOI responses by the Forum of Private Business (FPB) has concluded that payment terms have 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 ten 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 ten days increased from 51% to 55% 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.

Ian Cass, FPB Managing Director, said: 

"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."

The FPB's analysis also found that 13% of councils offer preferential terms to small and local suppliers as they are keen to nurture their supply chain. 

Cass said: "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, said Cass, and not every local authority was able to provide the necessary information at all.

"The fact that some other councils are not able to report how many bills are paid in 30 days … may indicate significant operational issues which go beyond failure to talk to the supplier," said Cass.

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