Successful partnership

Councils deliver social value by paying 1,500 small businesses early

Councils in North East England are leading the way in helping small businesses get paid faster, thanks to an initiative supported by the North East Procurement Organisation (NEPO), with 1,500 firms in the region benefitting from the scheme.

Gateshead, Middlesbrough, Newcastle and Northumberland councils, who work in partnership with NEPO, introduced a free early payment programme to pay invoices from small and micro firms, with a focus on helping local suppliers.

Small businesses often struggle to get paid on time, which can put them into financial difficulties.

However, NEPO’s free early payment programme can reduce by two-thirds the number of days suppliers need to wait for the payment of invoices, delivering millions of pounds of vital cashflow.

This, in turn, fuels jobs and encourages further investment throughout the wider supply chain, supporting the local economy.

Commenting, Small Business Commissioner, Liz Barclay said:

“It's great to see positive change in payment practice. Getting money into the hands of smaller businesses earlier reduces uncertainty and increases confidence, which is good for jobs and society. Early payment programmes are leading the way in progressive payment.”

The free, early payment programmes, allow councils to pay businesses with fewer than 50 employees much earlier than usual, at no cost to the firms.

Around 1,500 suppliers to the four councils are already benefiting from the programme, with another 500 due to enrol over the next few months.

NEPO's Procurement and Commercial Director, Steven Sinclair added:

“Small and micro businesses are the lifeblood of the economy in the North East. As significant buyers of goods and services, it's vital that councils lead the way in adopting good financial governance.

“NEPO is delighted that our members have recognised this by implementing progressive early payment practices, helping local enterprise during these uncertain times.”

Established in 1976, NEPO works in partnership with North East local authorities and the wider public sector to ensure public sector spending delivers value and drives positive outcomes.

NEPO procure a wide range of goods and services, meaning its procurement solutions feature suppliers of all shapes and sizes, from SMEs to large multinationals.

PSE365 will be hosting a Public Sector Procurement virtual event on 19 May, sign up here.

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