Scottish councils settled barely a quarter of their suppliers’ invoices in the past year within the suggested 10-day time limit, says a report by the Forum of Private Business (FPB).

Data obtained by the FPB through the Freedom of Information Act showed that none of the local authorities paid all of its bills within an average of 10 days, with most taking 30 days. The research comes a year after Lord Mandelson, the business secretary, urged public sector organisations to pay businesses within 10 days to help their cash flow.

“These figures make for quite disappointing reading,” said FPB spokesman Phil McCabe. “Many local authorities appear to be completely in the dark about the 10-day target. This suggests that there has possibly been a woeful failure on the part of central government to communicate its directive.”

Edinburgh city council, which in February announced an initiative to speed up bill payment to small businesses, was the best performer, settling bills within an average of 14 days, while South Ayrshire council took the longest at 31 days.

Argyll and Bute council said it would not normally settle invoices in advance of its standard 28-day terms. Glasgow city council paid only 8% of its bills within 10 days, while nearly a quarter of Orkney Islands council’s suppliers had to wait more than 30 days for payment.

McCabe said: “It would appear that councils in Scotland are not performing as well as their English counterparts on the 10-day figure.”

John Swinney, the finance minister, last week revealed that 95 % of payments to suppliers of the Scottish government and its agencies are made within 10 days.

He yesterday called on councils to follow suit: “It is vital that companies receive practical support of this kind, as we work to position Scotland’s economy for recovery.”

David Lonsdale, the assistant director of CBI Scotland, said: “Some councils have taken welcome steps to support firms during the downturn. However, local government as a whole needs to raise its game on this issue to aid the many firms who undertake work on behalf of the wider devolved public sector.”

But Cosla, the umbrella body for local authorities, described the report as “council-bashing”, claiming that most suppliers demanded payment within 30 days.

“It’s easy for the FPB to make such statements but the bottom line is that Scotland’s councils make strenuous efforts to pay invoices on time and their performance is measured by a statutory performance indicator, published by Audit Scotland,” a spokesman said.

“Councils fully recognise the financial difficulties faced by many businesses, especially at this time, and are taking a wide range of measures to assist businesses in coping with the economic downturn.”

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