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Yorkshire council leads the way in changing the culture of late payments to SME’s PDF Print E-mail
Wednesday, 03 June 2015

Barnsley Metropolitan Borough Council is leading a growing trend among councils to change the way that it pays its suppliers. In a shake-up designed to combat late payments, the council now operates a Premier Supplier Programme which enables it to accelerate the payment of invoices to its supplier base.

The programme, managed in partnership with Oxygen Finance Ltd, is a relatively simple concept; participating companies that sell to the council will have their invoices fast-tracked weeks in advance in return for a small negotiated deduction for the accelerated payment. This gives suppliers the ability to alleviate potential cash flow problems by giving them quicker access to their payments.
The leader of Barnsley Metropolitan Borough Council, Sir Stephen Houghton, says that making sure they have a growing business base in Barnsley is a key ambition for them. He adds that:
“Having a scheme which helps us to pay our suppliers early, helps them with their cash flow and helps them be successful matters to us. If it also saves the council money, then that’s even better
Businesses tell us that cash flow is the biggest issue, and getting paid early is often what is keeping them afloat. It is about doing things differently; it is about being innovative, about being creative and about picking up examples from others.
The latest research from Bacs Payment Schemes Limited (Bacs) shows that the late payment debt burden shouldered by UK businesses has reached £46.1bn. Moreover, 60% of UK SME’s are now experiencing late payments.
John Healey, MP for Wentworth and Dearne, also added:
"Many councils in the North have become stellar examples of how strong a town can become when the public sector works hand in hand with businesses to support jobs, growth and enterprise.
"Guaranteeing prompt payment to their own suppliers is a practical and proven way for all local authorities to help local firms in their area. Barnsley council is a national pacesetter in implementing early payments schemes - and other Local Authorities can learn from their example."
As council budgets are getting ever tighter, more innovative ways to save money and/or raise revenue are desperately sought. This solution by Barnsley Metropolitan Borough Council helps deliver much needed savings, whilst at the same time creating better quality supplier relationships and providing a boost to the local economy.

(Source - Westminster City Council Press Release)


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