IT suppliers lament local authority invoice delay

Many local councils fail to meet Mandelson mandate

UK IT suppliers have criticised local authorities for failing to pay invoices within the ten-day period specified by government guidelines a year ago, while smaller companies say they still struggle to get on the public sector procurement ladder at all.

Dataplex Systems is an independent ICT consultancy with offices in Manchester and Oxford, which does around 20 per cent of its business with the public sector. Company finance director Dave Robertson said that many councils take around 20 days more to pay an invoice than organisations in the private sector.

"It varies from one council, department or NHS trust to another, but the bureaucracy involved means we cannot get the decision-maker to sign off the paperwork," he said, adding that the time and effort involved in chasing debts can be a serious drain on the IT supplier's resources.

Robertson also says it is difficult for smaller IT vendors to win contracts with local councils ahead of larger suppliers that already have their foot in the door.

"It is supposed to be transparent, but we all know it is not always that way. It is hard to compete with larger IT suppliers with tender processes in place," said Robertson.

"Transparent, it's almost jet black!" said Darren McGuss of Chase Computer Consultants, which specialises in providing voice over IP and broadband connectivity to the private sector. "They do put out contracts to procurement but it always tends to be the same larger, national organisations rather than smaller local businesses that end up doing the work."

"Rather than shopping around, they get used to using one particular company for most purposes, and they are not particularly open about saying this is what they are doing," added McGuss.

Figures published last month by the Forum of Private Business (FPB), a not-for-profit organisation that offers advice to more than 25,000 small businesses in the UK, suggest that many councils appear "oblivious" to the ten-day target first outlined by business secretary Lord Mandelson in October last year.

Rather, according to FPB figures, the average time for local councils to pay invoices was 19 days, while some admitted that they had problems paying up inside a 30-day time frame.

"Some businesses are paid for their goods and services within a few hours, but others have to wait more than a month before receiving the money owed to them – it depends on which council they are working for and where they are in the country," said FPB national chairman Noel Guilford in a statement.