Treasury exposed as late payer

THE Treasury has been revealed as one of the worst culprits when it comes to late payment to suppliers.

Despite the introduction of special legislation several years ago, Chancellor Gordon Brown's department still fails to pay one in five of its suppliers on time.

It is estimated that late payment is responsible for the collapse of one in four small businesses. In an attempt to encourage entrepreneurs, the Government has also given firms the right to claim interest on outstanding payments.

But a parliamentary audit by the Libs Dems of the payment performance of Whitehall reveals that the Treasury is a major offender.

The Crown Prosecution Service is slow in paying more than 20% of its suppliers. But the Government's Actuary Department is the worst, failing to settle up to a third of its suppliers' bills on time.

The Federation of Small Businesses estimates that a quarter of failures among small firms are due to poor cashflow.

It said: 'When a small business has a government contract, it can represent up to 60% of turnover. There is no excuse for such departments not to pay on time.'