Smaller and local businesses could start receiving payment from suppliers quicker under new changes in procurement processes.
Cabinet members at North Tyneside Council have agreed a range of measures to ensure local businesses can compete for and win more council contracts, and are paid promptly.
Last year the authority spent more than £244m and aims to pay off supplies’ invoices within 14 days. However, some of the council’s partners take longer to pay.
Cabinet agreed to adopt several new amendments relating to future contracts for goods and services that will require council contractors to pay their own suppliers and sub-contractors within 30 days.
Mayor Norma Redfearn said: “The council is committed to supporting local business and helping them overcome the barriers to tendering for council contracts.”
“After listening to local businesses I am acutely aware that prompt payment is critical to the cash flow of many suppliers, especially for small businesses, and late payment can lead to serious problems.
“By agreeing these new contract provisions we are doing everything in our power to help local suppliers while securing the best value for our customers and the people of North Tyneside.”
Coun Ray Glindon, cabinet member for finance and resources, added: “The council and a number of its partners have signed up to the Government’s ‘Prompt Payment Code’ to encourage good payment practice.
“We also have a Procurement Strategy which sets out a clear ambition that the numbers of local suppliers – both business, and the voluntary and community sector – should be encouraged to increase for the benefit of the local economy wherever possible.
“We have also carried out extensive consultation with the business community and the voluntary and community sector which has lead to the council making a number of practical changes to simplify its procurement process and make contracting opportunities easier.”