SMEs face headache from late-paying local authorities

Business UK SMEs and small businesses continue to face issues with local authorities settling invoices late, according to the Forum of Private Business (FPB).

A recent survey of 500 firms by the Forum has indicated that almost three in four respondents considered late payments from the public sector to be either a ‘problem’ or a ‘serious problem’.

The FPB determined the average time taken to pay by local authorities was 19 days in 2009.

Although this is not a long time when taken in comparison to late payments from the private sector, which can see companies facing waits of 90 days for payment, it is still a long way above governmental targets for suppliers to be paid inside 10 days, which were implemented in 2008.

SMEs also face a postcode lottery, as some areas of the country see 52% of public sector bills settled on time, whilst others see 89% of invoices being settled late.

"The real public-sector late-payment problem is where local authorities are concerned, where a great many contracts for small firms originate," says FPB senior policy adviser Phil McCabe