Police forces failing small businesses on prompt payment, says lobby group | Knutsford Times

Police forces failing small businesses on prompt payment, says lobby group

By on September 4, 2010

Companies doing business with the police in some parts of the UK can expect their invoices to be paid within days, the Forum of Private Business has discovered.

However, firms in other areas can be left waiting over two months for payment from their local force, despite repeated Government directives urging public bodies to implement prompt payment policies.

The Forum used the Freedom of Information Act to ask every civilian police force in the UK how quickly they processed payments to businesses during the 09/10 financial year. Some forces managed to pay more than three quarters of invoices within 10 days and almost 100% of invoices within 30 days.

However, others paid less than 1% of their bills within 10 days and took more than 30 days to pay well over half their invoices, creating a huge gulf between the best and worst-performing forces.

Forum spokesman Chris Gorman said: “We found that some police forces appear to be excellent at paying businesses promptly. This is to be welcomed and I’m sure their efforts are appreciated by the smaller firms which work for them.

“However, many others appear to be making little or no effort to pay their suppliers and contractors quickly. This means that the companies they deal with may well find their finances under serious pressure while they are waiting to be paid.

“It also means the poorly-paying forces may be limiting the range of companies willing to work for them to only larger businesses with substantial cash reserves. This is bad both for small businesses and for the public purse, as it means there will be less competition in the tendering process.

“We would urge the forces which don’t seem to see prompt payment as a priority to follow the example set by their counterparts elsewhere in the UK, both for their own good and to help ensure the survival of small firms in their areas.”

In a request under the Freedom of Information Act, the Forum asked police forces four questions:

· Under its standard payment terms, how quickly, in days, does your force aim to pay invoices from suppliers and contractors?
· During 2009/10, what percentage of invoices did your force settled in 10 days or less, from the invoice date?
· During 2009/10, what percentage of invoices did your force settled in 30 days or less, from the invoice date?
· If possible, please also supply the mean average of the amount of time, in days, your force took to settle bills in 2009/10.

The Police Service of Northern Ireland emerged as the best-performing force, both for 10-day and 30-day payment. It processed 82% of invoices within 10 days and 98% of invoices within 30 days.

Strathclyde Police and the City of London Police were also top-performing forces by the two measurements.

On the other hand, Merseyside Police appeared to be the worst force for 10-day payment after it admitted it had failed to pay any bills within this timeframe. Nottinghamshire Police was the second worst by this measurement, with a figure of 0.92%.

Avon and Somerset Constabulary emerged as the worst for 30-day payment, paying just 37% of bills within the month, closely followed by Staffordshire Police, on 43%.

The poor performances of many forces meant that, on average, UK police forces paid just 24% of invoices within 10 days and 77% within 30 days.

Forum members frequently cite late payment as one of the main threats to the survival of their businesses.

Police forces have procurement budgets running into tens and even hundreds of millions of pounds. They purchase a wide range of goods and services from businesses, many of which are small to medium-sized enterprises.

These include everything from software, IT and communications equipment to cycles, waste disposal, livery fitment, building maintenance, vehicle recovery, veterinary care and dog food.

Many forces also outsource highly specialist services such as drug testing, driver training and psychiatric treatment, which may be carried out by smaller businesses.

The Forum’s research into the payment practices of police forces follows similar investigations into councils and NHS trusts.

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