Just one third of councils pay contractors in 10 days

Only one third of local authorities are sticking to government guidelines to pay smaller contractors within 10 days.

Leaders of the Civil Engineering Contractors Association (CECA) quizzed chief executives of every local authority in England and Wales on their payment practices for SMEs.

Only 34% are paying within the 10-day limit recommended by the government while 28% are taking more than 30 days to pay subcontractors' bills.

The association recognises payment within 30 days of an invoice being processed as "prompt".

Rosemary Beales, CECA director, said: "Ten-day payment and prompt payment can offer small civil engineering contractors a lifeline in the current economic climate, improving cash flows and reducing the need for large overdraft facilities and bank lending.

"Local authorities provide a great deal of direct work for smaller contractors and, whilst many local authorities are taking steps to pay small businesses within 10 days, the majority are falling short."

The fastest payers in the country were in the north-west. All local authorities taking part paid within 30 days and nearly half offered 10-day payment terms.

Yorkshire and Humberside were among the worst performers with only one local authority - Kirklees Council - promising to pay up within 10 days.

Rosemary Beales said: "The government's commitment to 10-day payment is commendable and achievable. Many local authorities may have payment terms of longer than 10 days in current contracts but they also have a duty to the people living in their area to support business and protect jobs. Adopting the government's initiative and offering 10-day payment is one way in which they can do this."