Member Article

North West councils are acting to help small businesses

Salford and Trafford council are following the example of Bolton council to help small businesses get paid faster.

After being written to by the FSB local councils are agreeing to amend their payment policies to ensure small businesses are paid in a timely fashion.

Last month FSB research showed just one council in the region, Bolton, was using contractual arrangements to ensure sub-contractors hired by official local authority suppliers to fulfil a job, are paid within 30 days.

This is how fast all councils are supposed to pay suppliers, but many of these – who often big businesses – fail to then pay their own sub-contractors in such a timely fashion.

The FSB has praised Salford Council after the authority made a business friendly change to its procurement policy.

Trafford Council have also recently stated that they too are looking at changing their policy. Leader of the Council, Cllr Sean Anstee, told the FSB they were looking to introduce ‘contract clauses’ for their suppliers, but said it would require ‘careful consideration’ before being implemented with regards to how the council monitored performance, and also of the consequences for those suppliers who went on to breach the contract.

Salford Council’s City Director Jim Taylor, said: “Salford City Council places a strong emphasis on delivering social and economic gains wherever possible from its procurement activity.

“One of the aspects that we have recently considered is the payment terms for sub-contractors.

“We have now amended the relevant clause in Salford City Council’s standard terms and conditions of contract to ensure that our suppliers are contractually obliged to making payments to sub-contractors within the 30 day timeframe set out by the Government.

“This requirement was already included in some of the terms and conditions for construction services, but we have now ensured that this will be taken forward in all future procurement activity, whatever the category of activity.”

The FSB’s Regional Chairman in the Manchester & North Cheshire region, Richard Gregg said: “This is great news for those small businesses who at some point in the supply chain, provide goods or services for one of Salford Council’s suppliers.

“Prompt payment is a blessing for small firms, many of who struggle with cash flow, so anything that can help remedy that is very welcome. We strongly urge other local councils to follow suit.

“All public bodies can and should be making this gesture to help small firms.”

This was posted in Bdaily's Members' News section by Sophia Taha .