The Forum of Private Business asked all the UK’s police forces about their payment records, and it’s a bit of a good cop/bad cop story: the Police Service of Northern Ireland came out on top, with 82% of invoices processed within 10 days, and 98% within 30. By contrast, at the bottom end of the scale was Merseyside Police, which admitted it hadn’t managed to pay any bills at all within 10 days. The Avon & Somerset Constabulary is another force finding that the long arm of the law doesn’t appear to stretch quite as far as its pocket: it only managed to pay just over a third of its bills within a month. Watch the coppers, and the pounds will look after themselves.
Government agencies are supposed to pay invoices within 10 days, after Gordon Brown’s ‘payment pledge’ back in 2008 - which was specifically designed to show support to small businesses. The idea was for the Government to set an example to other business by helping small firms out with their cash flow. Quite rightly, it’s one of the few policies the Coalition hasn’t axed – but it seems that while the good intentions are still there, the reality is sometimes rather different. And with police forces now outsourcing everything from IT and communications to dog food and psychiatric treatment, that’s a lot of businesses potentially left with a significant hole in their cashflow.
The bad news is, it's a bit hard to see things improving any time soon. October’s spending review is set to have a pretty devastating impact on the public sector budgets - and if Government bodies are being encouraged to penny-pinch, they might be more likely to hang onto their cash for a bit longer (they won't have the same pressure on the cashflow as small firms, but still). And perhaps the more significant point, as far as these small firms are concerned, is that some of these contracts will disappear altogether. Some would argue that it's better to have a late payment than no payment at all.