News

January 22, 2010

Government bodies fail to deliver on ten-day payment pledge, claims Graydon

Local and national government bodies have failed to stick to Lord Mandelson's pledge to settle invoices from small firms within ten days, credit reference agency Graydon UK has claimed.

A January 2010 Graydon survey of 320 small firms supplying government agencies, local government bodies and central government found that 98 per cent did not have their invoices paid within ten days – a negligible improvement on a figure of 99 per cent recorded in March 2009.

The poll also found that 63 per cent have to wait more than 30 days for settlement – the standard trade invoice payment period.

Introduced in 2008, the ten-day payment pledge was one of a raft of measures introduced by the Government aimed at boosting small firms' cashflow during the recession.

"Unfortunately it's now apparent that ministerial willpower hasn't been enough to inject more speed into the machinery of the public sector," said Graydon UK managing director, Martin Williams. "The public sector needs to set a better example when it comes to paying for goods and services on time."

However, the Department for Business, Innovation and Skills (BIS) denied that businesses were being paid late by central government, and said it understood that prompt payment was crucial for helping small firms manage cashflow.

"That is why central government departments have committed to paying the majority of invoices within ten days – this is happening," said a BIS spokesman.

"The latest figures show 19 out of 20 central government invoices are now paid within this time. That's £107 billion of invoices paid to business within ten days by central government since June 2009.

"Figures across the rest of the public sector are also improving &ndash the average payment time for UK local authorities is now 19 days," he added.