New research by Good Business Pays exposes the payment performance of several local authorities and Local Authority Trading Companies (LATCs)
New research by the campaigning group Good Business Pays has shed light on the payment performance of various local authorities across the nation, as it calls for greater transparency from council divisions. Norfolk County Council report paying 96% of invoices within 30 days and does not report any late invoice payment, but the associated LATC (Norse Group) reports 43% of invoices paid late.
The findings of the report, compiled using data from Freedom Of Information requests, indicate a significant disparity in payment behaviours among local authorities and the trading companies they own, operate or have investments in (known as Local Authority Trading Companies). A considerable number of local authorities report much better payment terms than their own trading companies, which has raised concerns about transparency and accountability in financial management.
Terry Corby, CEO of Good Business Pays said: “Some local authorities within the data suggest a perfect payment time of within 30 days, and zero late payments, however upon further findings, their own trading companies (LATCs) who will often be using local small business suppliers tell a very different story.
We’re calling for greater transparency around how long local authorities take to pay their supply chains – with the additional complexity of LATCs, we’re certain that there’s plenty more to do to improve the payment performances of local authorities, to ensure that they are supporting local economies, establishing standards for businesses and overall being part of the local authority commitment to economic growth.”
The local authorities that report a commendable record of paying 100% of invoices within 30 days, with zero instances of late payments, include
London Borough of Bexley, Gravesham Borough Council, Mid Sussex District Council, Barnsley Metropolitan Borough Council and Hyndburn Borough Council.
The data reveals that a considerable portion of invoices for Birmingham City Council, East Lindsey, Flintshire County Council, Plymouth City Council and Stevenage Borough Council remain unsettled beyond the stipulated 30-day period, posing challenges for suppliers and impacting the local economy.
Cornwall Council report an average of seven days to pay suppliers with 99% paid within agreed terms, however, Corserv Solutions (100% owned by Cornwall Council) reports inconsistent payment terms, with 24% of invoices being paid late. Norfolk County Council report paying 96% of invoices within 30 days and does not report any late invoice payment, but their LATC (Norse Group) reports 43% of invoices paid late.
Conversely, Falkirk Council, which has recently been cited as the most supportive council in the UK for small businesses1, reports how 95% of invoices are settled under 30 days. Ceredigion County Council in Wales and Selby District Council in North Yorkshire were named top of the list of places in the UK where small and medium-sized businesses are most likely to succeed. Both local authorities and related LATCs pay well over 90% of their suppliers in under 30 days.
Terry continued: “New legislation (the Procurement Act 2023) will be introduced later this year to make it easier for small businesses to supply local authorities and to make local authority procurement practices more transparent. As public entities entrusted with taxpayer funds, local authorities have a responsibility to prioritise timely payments to suppliers. By fostering a culture of prompt payment, authorities can enhance efficiency, support small businesses, and promote economic growth within their communities.
The disparity in payment patterns among local authorities underscores the need for greater transparency and accountability in financial transactions.”
The local authority research comes just a month after Good Business Pays revealed the Late & Slow Payment Watchlist Spring 2024, naming companies who are serial late and slow payers. Thanks to the campaign, the UK branch of Coca-Cola has committed to paying small suppliers within 30 days.
Backed by the Federation of Small Businesses, British Chambers of Commerce, CBI, and manufacturers group Make UK, the Good Business Pays movement was launched in May 2021 to encourage the UK’s largest companies to speed up payments to small suppliers, helping them bounce back and inject vital capital into the economy. More recently, Intuit Quickbooks and Mastercard have pledged their support to the campaign to ensure small businesses are paid within reasonable timeframes.
To access the Local Authority Payments data and for further information, visit here.
| Best paying local authorities | ||
| Local authority | % of invoices paid in 30 days | % of invoices paid late |
| London Borough of Bexley | 100 | 0 |
| Gravesham Borough Council | 100 | 0 |
| Mid Sussex District Council | 100 | 0 |
| Barnsley Metropolitan Borough Council | 100 | 0 |
| Hyndburn Borough Council | 100 | 0 |
| Worst paying local authorities | ||
| Local authority | % of invoices paid in 30 days | % of invoices paid late |
| Birmingham City Council | 42 | 58 |
| East Lindsey | 51 | 49 |
| Flintshire County Council | 59 | 78 |
| Plymouth City Council | 70 | 30 |
| Stevenage Borough Council | 52 | 48 |
References
1. https://dojo.tech/business-funding/most-supportive-councils-for-businesses/