Local councils are paying suppliers on average 17 days after they receive invoices, despite government rules saying central departments should settle bills within five days.

Research by Asset Based Finance Association (ABFA) shows that some businesses are waiting up to 40 days for councils to pay, more than a month later than government guidelines stipulate.

The guidelines were introduced in 2010 and since then local government payment times have narrowed at a snail’s pace, from 17.7 days at the time to 17.3 days in the most recent calculations.

Jeff Longhurst, chief executive of ABFA, said: “Public sector organisations should be acting as role models for the private sector in paying their invoices as promptly as possible.

“Central government bodies have performed well in hitting their prompt payment targets — many now pay more than 90per cent of their invoices within five days. The current average of 17 days for local councils leaves a lot of room for improvement.

“Those that fail to pay within 30 days risk damaging businesses in their local areas,” he added.

The research also points out that sub-contractors on council projects can be hit twice by late payment, waiting both for the council and the main contractor to cough-up.