Third of government small suppliers are paid late

9 January 2015

According to the government's own report from the National Audit Office (NAO), a third of its small suppliers are being paid late with dates of some invoices not recorded properly.

 

It had pledged to ensure 80% or more suppliers would be paid within five working days, however the government now admits it has been unable to do so - many were paid after 30 days. The report also reveals that four departments (including Ministry of Defence and Home Office) are failing to keep records of when invoices have been received. 

£4.5 billion is paid for small business services each year out of a total of £40 billion. 

Head of the NAO, Amyas Morse, said "We are also seriously concerned about the prompt payment performance figures publicly reported by departments. These were overstated by the four departments we looked at".

"It remains to be seen whether the changes proposed in the Small Business, Enterprise and Employment Bill and secondary legislation will be enough to bring about improvements, not just in public sector payment practices but the private sector as well.”

The government's actions set a poor example for small businesses that rely on payments coming in on-time to help with cashflow. They should be leading the way to combat late payments, yet the government has fallen short on this occasion. Let's hope there are improvements over 2015.