Government departments are failing to keep 10-day payment pledges, according to commercial credit referencing agency Graydon UK.

The research shows that in a poll of SMEs, that supply government agencies, local government bodies and central government, 98% said that they are still not being paid within the 10-day timeframe pledged by business secretary Lord Mandelson in October 2008.

The research also shows that almost two-thirds of SMEs had been forced to wait more than 30 days for settlement of government invoices.

Martin Williams, managing director, Graydon UK, says: “The sentiment underlying the government’s pledge to radically curtail payment periods in the public sector is laudable but unfortunately it’s now apparent that ministerial willpower hasn’t been enough to inject more speed into the machinery of the public sector.

“It’s difficult to gauge how damaging the impact of this failure has been in terms of exacerbating the cash flow problems faced by small firms amidst the downturn. What’s certain, however, is that the public sector needs to set a better example when it comes to paying for goods and services on time.”