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Late payments to be laid bare in new transparency drive

25/07/14

Pound Signs -  HAAP Media Ltd. "freeimages"Local authorities and other public bodies will be told to publish data to reveal if they are "slow payers", in the latest government transparency drive, ministers have revealed.

A package of public sector procurement reforms will include a new requirement for all payments to be made within 30 days "for all the contracts in the supply chain". All examples of late payment - plus the interest paid as a result of that failure - must be published, MPs were told.

The new moves were revealed in a commons debate on late payment by local authorities, which highlighted problems, particularly affecting sub-contractors

Local government minister Kris Hopkins said: "The government will be introducing a number of key reforms later this year, as part of the transposition of the EU directive on public sector procurement into UK law.

"Those reforms will include a legal requirement for all new public sector contracts to include 30-day payment terms for all the contracts in the supply chain, so that smaller businesses are paid on time - and a requirement, from next year, for all public bodies to publish details of instances of late payment and interest paid as a result of those late payments."

Hopkins praised some councils - Bury, the City of London, Halton and Harrow - for being "committed to paying small and medium-sized enterprises within 10 days of invoices".

And he added: "Other councils, such as North Tyneside, have introduced e-procurement and e-invoicing, all of which are intended to streamline the procurement and payment process, reducing the instances of late paymentI can send a note to other authorities, signposting them to really good practice and, if they are not proactively seeking to pay their bills in the terms that we are talking about, encouraging them to go further."

The crackdown follows a report, last year by Lord Young, a Conservative former Cabinet minister, which stressed how better procurement can boost economic growth.

Lord Young also proposed:

* Requiring the public sector to publish data on all procurement spending with small businesses in one place.

* Requiring bodies to publishing all contract opportunities on 'Contracts Finder', the central government database.

* Scrapping 'pre-qualification questionnaires' (PQQs) - to assess technical and financial capability - below a certain spending threshold.

* Creating a "simplified, core PQQ with a standard set of questions", where PQQs are used.

Leading the debate, Labour MP Mary Glindon said: "Most councils have policies to ensure that their suppliers are paid promptly, but there is a problem with the terms being passed down to subcontractors."

Register: Library & Alerts

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