UK ministries miss own target to pay bills

2009-05-10

Official figures obtained by the SNP show UK departments are failing to pay suppliers within the government's own 10-day target at a time when it is crucial for businesses to have a steady cash flow in order to keep operating and to keep people in jobs.

The ten day target was introduced to try to help small businesses with cash flow during the recession, but parliamentary answers obtained by SNP Work and Pensions spokesperson, John Mason MP, have exposed concerns. For example the Home Office pays only half of its suppliers’ on time, while the Ministry of Justice managed to settle just 66 per cent of outstanding invoices.

In contrast more than 90 per cent of Scottish Government suppliers are paid within 10 working days, providing vital help for firms in a challenging economic climate.

Mr Mason said:

"There is no excuse for these extraordinary failures by the UK government to meet its own ten day target and pay its bills on time - particularly in these troubled economic times when a speedy cash flow is important to many businesses. This isn't simply about keeping the businesses afloat but keeping people in jobs.

"Ministers must personally take action to improve the performance of their departments and guarantee prompt payment to suppliers. It is essential in the current economic circumstances that departments make an extra effort to meet payment targets. People's jobs are dependent on a healthy and speedy cash flow for the businesses they work for.

"The Home Office seems to be the worst offender - failing to pay half of its bills on time. What’s worse is that’s actually an improvement on last November when less than 20 per cent were being paid on time.

"This is a real embarrassment to Lord Mandelson as he talks about support for small businesses in Scotland. Businesses want less talk and more action.

"In contrast the Scottish Government is setting the benchmark by paying more than 90 per cent of suppliers within 10 working days - providing more vital help for firms in a challenging economic climate.

"The Scottish Government’s prompt payment target complements other Scottish Government initiatives, like the full implementation of the Small Business Bonus Scheme, which is helping to improve companies' cashflow and release money to be ploughed back into their business, something clearly beneficial to the economy as a whole."

Note:

Details of Mr Mason’s parliamentary questions are detailed below:

1. Home Office

John Mason: To ask the Secretary of State for the Home Department what percentage of its suppliers her Department has paid within 10 days of receipt of invoice in each of the last five months. [272249]

Mr. Woolas: The percentage of invoices paid within 10 days to small and medium enterprises (SMEs) in each of the last five months is as follows:

Month	Percentage of invoices paid to SMEs within 10 days
November 2008	19
December 2008	27
January 2009	27
February 2009	36
March 2009	50

2. Ministry of Justice

John Mason: To ask the Secretary of State for Justice what percentage of invoices from suppliers his Department paid within 10 days of receipt in each of the last five months. [271856]

Maria Eagle: The information requested is contained in the following table: