Pay small firms sooner to ease cash flow, councils urged

SMALL companies are urging councils to settle bills early to ease their cash flow while credit is difficult to access. The move follows a lead set by Brentwood Borough Council in Essex and is echoed by Cambridgeshire Liberal Democrats who are urging the c

SMALL companies are urging councils to settle bills early to ease their cash flow while credit is difficult to access.

The move follows a lead set by Brentwood Borough Council in Essex and is echoed by Cambridgeshire Liberal Democrats who are urging the county council to develop a compact under which larger companies would agree a code of prompt payment with their suppliers.

The Lib Dems also want the county to declare a number of 'shop locally' days in the next three months and to provide public transport incentives to support them.

The Federation of Small Businesses says Brentwood has agreed to settle small firms' bills for goods and services within 20 days, rather than 30, and to use local suppliers wherever possible.


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This has been a constant theme of the Huntingdonshire branch of the FSB, and the district council's business forum in January is expected to look again at the issue.

Councils have a statutory duty to give Council Tax payers the best value for money, but officers believe they may be able to include environmental considerations, such as atmospheric pollution, in their assessment of best value. HDC is keen to do whatever it can to support local companies in the current economic climate.

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FSB Huntingdonshire chairman Malcolm Lyons said: "We welcome this move by Brentwood Borough Council to support small businesses, which will be particularly helpful in these very testing times, and we would urge other local authorities to follow suit.

"The FSB has been calling for payment times to be reduced, as this greatly improves the cash flow of small businesses, and for local authorities to contract with small businesses wherever possible to give a boost to the local economy.

"This move follows the Government's announcement that it will pay all its bills within 10 days in order to support small businesses. A similar move on the part of local authorities will also be welcomed by small firms.

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