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Osborne’s suggested business rate reforms will reward poor payment practice

RELEASE DATE:   -Date-

RELEASE TIME:     -Immediate-

Osborne’s suggested business rate reforms will reward poor payment practice

The Forum of Private Business (FPB), a small business support and lobby group, has called for a need to change the way that London’s councils pay their suppliers if the Chancellor’s vision of giving them all the proceeds from business rates is to be successful.   

 

The capital showed indifference to their small business supply chain by reporting the worst average payment terms of any English region or simply not reporting figures at all. Overall they were most likely to pay suppliers within 10 days but otherwise the councils were the worst performing in the UK.

 

Figure 1: Ranking of regions on payment speed (mean figures)

 

 

Proportion paid within 10 days

Proportion paid within 30 days

Average time taken to settle bills

 

Percentage

Rank

Percentage

Rank

Percentage

Rank

East of England

45%

9

91.7%

5

17.59

7

East Midlands

61%

2=

94.2%

1

15.51

3

London

66%

1

89.4%

9

22.00

9

North East

58%

5

92.3%

4

16.16

4

North West

59%

4

92.4%

3

14.56

2

South East

50%

7

92.8%

2

16.31

5

South West

56%

6

90.4%

7

17.44

6

West Midlands

61%

2=

90.1%

8

14.22

1

Yorkshire

46%

8

91.3%

6

19.59

8

 

The region has gone backwards from 2012 when London councils settled their bills in 17.4 days, the fourth fastest area of the country.  In contrast London’s private sector is England’s second promptest payers.  However the private sector takes around double the time to settle bills at 45 days.

 

Figure 2: Comparison of time taken to settle bills by potential business rates receipts

 

Number of properties

Average rateable value (£)

Total rateable value (£ million)

Regional rank based on rateable value

Ranking on average time to settle bills

East Midlands

147,582

24,716

3,648

8

7

East of England

184,197

28,703

5,287

4

3

London

306,231

54,028

16,545

1

9

North East

54,360

31,279

1,700

9

4

North West

237,118

25,654

6,083

3

2

South East

285,174

31,738

9,051

2

5

South West

176,536

24,731

4,366

7

6

West Midlands

184,507

26,071

4,810

6

1

Yorkshire and the Humber

190,560

25,283

4,818

5

8

Source: IFS http://www.ifs.org.uk/budgets/gb2014/gb2014_ch11.pdf

 

Ian Cass, Managing Director of the Forum stated: “Paying suppliers on time is absolutely crucial to the recovery of the British economy.”

 

“London councils either pay promptly or the invoices appear to go into a black hole, which is hugely frustrating for businesses.  Councils in London will benefit the most from the proposed changes to non-domestic rates but the majority will have to change to the way they communicate with small businesses if they are to increase wealth creation in their borough.”

 

“There are however concerns that some councils are not able to report how many bills are paid in 30 days which may indicate operational issues within these councils.  London showed a particularly poor response rates with under half of councils reporting figures on the average time to pay.” concludes Mr Cass.

 

ENDS

 

Notes to editors

The Forum has created a report including data from all the Freedom of Information requests that were received in the 20 days..

Twitter account - https://twitter.com/The_FPB

Forum blog - https://www.fpb.org/blog

Media contact for this press release

Thomas Parry

Research Manager

Tel:      01565 626015

Mobile: 07885 888085

Email: thomas.parry@fpb.org

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