10 March 2010
Source: LocalGov.co.uk ()

Exclusive: EU prepares to soften ‘late payments’ rules


Mark Conrad

European leaders are preparing to soften their hard-line stance on new procurement rules that could force UK public bodies to pay out £600m in fines for late payments.

LocalGov.co.uk understands that heavy lobbying by UK councils and other public bodies has initiated a European Union re-think over current plans to implement the EU’s ‘late payments directive’.

Under the original proposals for the directive, any public body that failed to pay suppliers’ invoices within 30 days faced fines of up to 5% of the value of the invoice – even if suppliers sent inaccurate, or incomplete, claims.

European MPs will vote on the directive on 8 April. But sources told this website that heavy lobbying by the Local Government Association and the likes of the NHS Confederation, both in the UK and Brussels, ‘could yet mean that the 5% figure is reduced or amended’.

A separate source in Brussels said he was ‘confident’ the original proposals would be amended.

Last year, Cllr David Parsons, chair of the LGA’s improvement board, told LocalGov’s sister publication, The MJ, the original proposals were ‘Draconian’ and risked the wrath of local authorities across Europe.

‘The EU seems to be sleepwalking into an unfair and grossly disproportionate system that hits key public services,’ he said.

Speaking at the time, a senior Whitehall official warned the EU plan was ‘daft, at a time when we’re [all] trying to reduce red tape’.

See next week’s MJ for more details





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