More than £21m paid early to support businesses

Over 14,000 invoices have been paid early to help local firms through the cost of living crisis.
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More than £21m paid early to suppliers to help businesses tackle cost of living pressures

A scheme set up by Newcastle City Council is helping local businesses through the cost-of-living crisis by ensuring suppliers to the council are paid early.

With rising inflation and energy costs, many small and micro businesses are facing challenging circumstances and accelerated payments play a key role in keeping them afloat.

Since the FreePay scheme was launched over £21m in vital payments has reached the bank accounts of small and micro businesses, supporting the local economy by helping businesses with their cash flow and boosting growth.

Eligible, small, local suppliers are automatically enrolled into the FreePay programme. FreePay enables Newcastle City Council to pay these suppliers early without charge, supporting business growth and delivering social value through job creation.

Over 14,000 invoices have been paid early for free by Newcastle since the scheme’s launch and over 300 suppliers are now registered on the FreePay programme.  Payments are made in less than half the contracted time and over the last 3 months this has averaged 8.5 days.

Cllr Paul Frew, Newcastle City Council cabinet member for Resources and Cabinet Secretary said: “As a council, one of our key priorities is supporting people through the cost-of-living crisis. This support extends to our local suppliers, ensuring that through our FreePay programme they receive accelerated payments, getting much-needed cash quickly during these difficult times.

“We’re proud to offer this service to support our local business community.”

Faster payment for free helps suppliers with their cash flow and can reduce reliance on loans or overdraft facilities, at a time when the cost-of-living crisis is having a huge impact on local businesses and their employees.

It has been estimated that late payment leads to 50,000 firms a year failing across the UK. Getting paid as early as possible provides significant benefits for both large and small companies and can make a substantial impact on the growth and development of businesses.

Larger businesses are eligible to join the council’s Supplier Incentive Programme. The programme applies a small, pre-agreed, rebate based on how quickly the payment is accelerated. The programme provides the council with additional funding to reinvest back into delivering essential local services.

Both programmes are supplied by the council’s partner, Oxygen Finance. To find out more go to www.newcastle.gov.uk/sip.