Cash & Liquidity ManagementCash ManagementLate Payment Scheme Targets UK Local Authorities

Late Payment Scheme Targets UK Local Authorities

A late payments initiative, launched by UK payments service provider Oxygen Finance, aims to unlock £1.5bn for local authorities over five years as it tackles the issue of late payment.

The early repayment programme is designed to enable buyers such as local authorities to pay suppliers more quickly in exchange for a cash rebate. Those authorities that pay early will receive a rebate of at least 1% of the amount they have paid out from Oxygen, which will also take a cut.

The scheme has been piloted by Oldham council and could now be rolled out to other UK authorities in the UK. Oldham council hopes to generate an estimated extra four-year income of £2m from £73m that it is putting through Oxygen’s programme.

Roberto Moretti, who joined Oxygen as European chief executive officer (CEO) in November, said that small businesses spend an average of 14 days each year chasing payments at a cost of £680m. “There are also examples of local authorities spending more money processing low value invoices than the actual price of the product or service they commissioned,” he added. “Invoices cost a minimum of £70 to process and hundreds go through systems worth less than that.

“Local authorities alone in the UK annually spend £172bn – £75bn on running expenses – and have quasi-AAA credit ratings, yet they waste money on a needless, slow, paper-based system of payments.” Moretti added that the scheme will boost cashflow for small and medium-sized enterprises (SMEs), while also delivering extra funding to councils.

Related Articles

Make way for the millennial accounts payable activist

Accounts Payable Make way for the millennial accounts payable activist

1w Nilay Banker
Rising rates put pressure on accuracy of cash forecasts

Cash Management Rising rates put pressure on accuracy of cash forecasts

3m Conor Deegan
Burn those spreadsheets - and 4 other ways that treasurers can help their CFOs sleep better

Automation Burn those spreadsheets - and 4 other ways that treasurers can help their CFOs sleep better

3m Bob Stark
How to forecast cash flow: what software should I use?

Cash Forecasting How to forecast cash flow: what software should I use?

3m Michael McCaw
What is the function of corporate treasury?

Cash Management What is the function of corporate treasury?

3m Michael McCaw
China’s regulatory changes stimulate international interest

Asia Pacific China’s regulatory changes stimulate international interest

4m Michael McCaw
Treasury TV: Jill Harrison, Whitbread Plc

10 Minutes With The Treasury Treasury TV: Jill Harrison, Whitbread Plc

4m Victoria Beckett
Cash flow in focus for investors

Cash Management Cash flow in focus for investors

4m Conor Deegan