Major departments show marked decline in prompt-payment performance

Data shows suppliers have been waiting longer to be paid as government deals with coronavirus crisis
Image: Mohamed Hassan via Pixabay

By Sam Trendall

18 Aug 2020

As the coronavirus crisis took hold, some major government departments saw a big decline in the proportion of their suppliers being paid within target deadlines.

Over the last couple of weeks, many departments have published quarterly prompt-payment data for the first quarter of the 2021 fiscal year – covering the period from 1 April to 30 June.

The government’s target is to pay 90% of invoices within five days, and the remainder within 30 days.

But at the height of the coronavirus crisis, two of Whitehall’s biggest departments – and two that had among the biggest workload in leading government’s response to the pandemic – showed a significant drop-off in the proportion of suppliers being paid promptly.

Quarterly data from the Department for Work and Pensions showed that during 2019-20, the proportion of invoices DWP paid within five days never dropped below 94.2% – and, in some quarters, was as high as 98.7%. Throughout the year, about 99% of suppliers were paid within 30 days.

But in the first quarter of this financial year, the department managed to pay just 71.2% of invoices within five days. Some 7.3% of suppliers were still awaiting payment after 30 days.

There was a similar story at HM Revenue and Customs, which in 2019-20 paid between 91% and 95% of its bills within five days. In each quarter of that year, the tax agency paid well over 99% of invoices inside 30 days.

In April to June 2020, more than one in four of HMRC's suppliers (26.2%) had to wait more than five days to be paid. The number of invoices paid within 30 days also fell by several points, to 96.2%.

The Foreign Office, meanwhile, paid 87.7% of its bills within five days during 2020-21’s opening quarter. This compares with figures of 96-98% for each quarter of last year.

Five days Time within which government aims to pay 90% of its bills

7.3% Proportion of DWP suppliers that were still awaiting payment after 30 days in Q1 of 201

2015 Year in which prompt-payment targets, and mandatory reporting of performance, was introduced

73.8% Proportion of HMRC invoices paid within five days in Q1 of 2020-21

 

Leaders and laggards

Prior to the declines, these departments were among Whitehall’s best performers on prompt payment.

Data for the past 18 months shows that the Ministry of Justice pays about 85% of invoices within five days, and 97% within 30. This has been maintained during the coronavirus crisis.

During the quarter that ended on 30 June, the Cabinet Office – which oversees government prompt-payment policy and targets – paid 87% of bills within five days, and 98% within 30 days. This is in line with its performance during the 2019/20 year,

Public Health England, which publishes stats every month, paid 76.7% of suppliers within five days in July 2020 – its lowest rate in 15 months. But the agency consistently achieves a five-day payment rate of 80-85%, with 85-90% of invoices typically paid within 30 days.

The Department for Environment, Food and Rural Affairs is one of government's most inconsistent performers on prompt payment; in the last six quarters, its proportion of suppliers paid inside five days has fluctuated from 58.2% to 84.9%.

During the first quarter of this year, the department paid 80.8% of bills in less than five days, and 91.3% within 30.

The Department of Health and Social Care – which has not published any data since the third quarter of 2019-20 – has become one of government’s least prompt payers in the last couple of years.

Up until the end of 2017-18, DHSC routinely paid more than 95% of invoices within the five-day target. 

This figure dipped to around 65-70% in the first and last quarters of 2018-19 and continued plummeting during 2019-20.

For last year’s opening three quarters, its five-day payment stood at 64%, 55% and 49%, respectively.

Sam Trendall is editor of CSW's sister title PublicTechnology, where this story first appeared.

Read the most recent articles written by Sam Trendall - Government trebles number of services using One Login

Categories

Commercial
Share this page