Public sector 10 day payments are not being passed along the supply chain, according to research by the Forum of Private Business (FPB).

While official figures show most central government departments pay main contractors within 10 days, the forum says that some sub-contractors and suppliers have been left waiting for payments for months. By ensuring 10 day payments are passed along the supply chain, the FPB says prompt payment could be used as an incentive for more small businesses to sub-contract on government sponsored projects.

The forum’s head of policy Matt Goodman says: “For many smaller sub-contractors this is the real story behind the commitment to prompt public sector payment.

“What is the point in main contractors being paid within 10 days if firms further along the supply chain have to wait considerably longer for their money?

“Passing on prompt public sector payment throughout the supply chain would not only help more small firms maintain a healthy cash flow, but it would also encourage more businesses to bid for public contracts.”