Public sector not paying bills in 10 days

Chris Wheal

Feb 1st 2010

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Filed under: Small Business, Public Services

Nearly one in three payments from the public sector to small businesses are paid late, the latest Federation of Small Business (FSB)/ICM survey shows, despite a commitment over a year ago to pay within 10 days to boost the economy.

At the risk of sounding like a Monty Python sketch: that's luxury. You don't know you're born. You should try getting money out of the private sector. In fact the survey points out that the private sector is still worst.

FSB members (and I declare an interest: I am one) were asked whether they received payment from the following list of organisations early, late or on time. The late payment figures were:

Police/fire 18%
School/university/college 22%
Devolved Government 23%
Olympics 2012 25%
Local authorities 25%
NHS 29%
Government agencies 30%
EU institutions 30%
UK Central Government 31%
Private sector 34%

Late payment has serious consequences. The survey shows that 41% of small firm owners dipped into personal savings and 43% used their overdrafts last year. 21% used a personal credit card.

How late is late?

The FSB accepts that the way it phrased the question means many will have answered based on "late" being more than the ten days the government has specified. Given standard terms are 30 days and some sectors up to 90 days, being paid a few days more than ten would be a dream for many firms.

The FSB is right to demand that government bodies take a lead in tackling late payment, but it is also picking on an easy target.

When your own survey finds that the worst sector, with more than one in three firms paying later, is the private sector, it is worth pointing out who the real villains are.