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| Brown promises small firms 10-day payment Sector: What the papers say UK - A pledge by Gordon Brown to pay small firms that work for the UK Government within 10 days of invoice has not been matched immediately by Holyrood. The Prime Minister came to the aid of small businesses - those with fewer than 250 employees - announcing that those working for government departments will no longer have to wait 30 days for their money. The move, to take immediate effect, was made to improve liquidity for small firms, many of which have been hit hard in the economic downturn by poor growth and dearer overdrafts. Last night it emerged that the promise will not apply to firms contracted by Holyrood. A spokesman for the Scottish Government said: "We are committed to pay all supplier invoices within the terms of the contract and aim to pay within 30 days. We are introducing changes to our systems which will improve payment performance to help SMEs - and all suppliers - and will reduce the existing payment periods." The Federation of Small Businesses Scotland said that delayed public sector payments were a "recurring theme" for some members and it would encourage the Scottish Government to follow the example of Westminster. Scotland is often described as a "small business economy" and 93% of companies have 10 employees or fewer. A federation spokesman hoped the UK Government move would be replicated by the Scottish Government, local governments and quangos. He said: "A lot of small firms do business with the public sector, from mowing the lawns to cleaning the windows to consultancy work." The government in Scotland, and particularly local government, had a decent payment record, he said but larger organisations did not have the same reputation. He went on: "Organisations like the NHS do pose a bit of a problem for some of our members. Other problems arise when you have sprawling accounts departments who are not always 100% on top of their invoices." He added: "A lot of small firms have built up a large cash reserve but slowly but surely it is being eaten by late payments by larger organisations and a downturn in growth. Banks have recently increased their interest rates on overdrafts.. "We hope that this rescue package will filter down into the real economy - that is, the people that you buy your goods and services from rather than those who deal with six-digit figures. "The public, which includes the small-business sector, is footing the bill for the banks. If the banks are not handing down the interest rate cuts, we would be very disappointed." |