Council Paying Late? 30-Day Payment Rights for Care Providers

If a council is paying your care invoices late, the Procurement Act 2023 gives you a statutory right to be paid within 30 days. Section 68 implies a 30-day payment term into every public contract it covers, from the day the council receives a valid invoice, and any contract term that tries to override it has no effect. For domiciliary care and supported living providers carrying weekly payroll, that is a cash flow protection worth knowing in detail.

At a glance

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- The rule: Procurement Act 2023, section 68(2). Sums due must be paid within 30 days of the invoice being received, or of its due date if later.

- No contracting out: section 68(6). Any term restricting or overriding the implied terms is without effect.

- Disputes: section 68(4). The council must notify you without undue delay if it considers an invoice invalid or disputes it.

- Subcontractors: section 73 implies the same terms into every public sub-contract.

- Transparency: section 69 payments compliance notices, published every 6 months from 1 January 2026. Section 70 publication of payments over £30,000, quarterly from 1 April 2026.

- Interest: statutory late payment interest is 8% plus the Bank of England base rate, and a lower rate cannot be used in a contract with a public authority.

- Sources: section 68, GOV.UK late payment guidance.

The 30-day payment rule for council care contracts

Section 68 of the Procurement Act 2023 has been in force since 24 February 2025. It implies payment terms into public contracts awarded under the Act. The core term is in subsection (2): any sum due must be paid before the end of 30 days beginning with the day the invoice is received, or the day it falls due if that is later.

Subsection (6) closes the loophole. A term that purports to restrict or override the implied terms is without effect. A framework agreement that says the council will pay in 45 or 60 days does not displace the statutory 30 days for contracts covered by the Act.

Section 88 applies equivalent terms to regulated below-threshold contracts, so smaller care contracts are not left out.

What makes an invoice valid

Section 68(9) sets the minimum information a valid invoice must contain:

• the name of the supplier
• a description of the services supplied
• the sum requested
• a unique identification number

Councils frequently add their own requirements, such as a purchase order number or a service user reference. Put them on every invoice. Where your electronic call monitoring data feeds the invoice, reconcile it before sending, because a disputed hours total is the most common reason a care invoice is held.

Section 68(4) requires the council to tell you without undue delay if it considers an invoice invalid or disputes it. Silence followed by late payment is not what the Act allows.

Transparency: the payments compliance notices

The Act adds two publication duties that make council payment performance visible:

• Section 69. Contracting authorities publish payments compliance notices every 6 months, in force from 1 January 2026, setting out their performance against the 30-day term.
• Section 70. Authorities publish payments over £30,000 every quarter, in force from 1 April 2026.

These notices are worth reading before you bid. A council with a poor payment record should change how much working capital you plan for in your pricing.

Late payment interest on public contracts

GOV.UK guidance on commercial debt states that statutory interest is 8% plus the Bank of England base rate, and that you cannot use a lower interest rate where you have a contract with a public authority. Fixed recovery charges of £40, £70 or £100 apply depending on the size of the debt.

Whether you claim it is a relationship decision. Many providers choose to raise it formally only after a documented chase, but knowing the entitlement exists changes the tone of the conversation with the council's payments team.

Subcontractors and lead provider models

Section 73 implies the 30-day terms into every public sub-contract. If you deliver as a subcontractor under a lead provider arrangement, the lead provider has to pay you within the same window. If you are the lead provider, your pricing and payment process must allow for paying your supply chain on time even when the council is late.

How to protect cash flow in your next care tender

1. Read the payment schedule in the contract terms and note where it differs from 30 days.
2. Check the council's payments compliance notice under section 69.
3. Price working capital for the gap between your weekly payroll and the 4-weekly or monthly invoicing cycle. Our guide on how to price a care tender when the fee rate won't fund the service covers the cost build-up.
4. Build the invoice from your call monitoring data and reconcile planned against delivered hours before submission.
5. Log every dispute notice with date received, so you can show whether the council met section 68(4).

Frequently asked questions

How long does a council have to pay a care provider's invoice?

Under section 68(2) of the Procurement Act 2023, a sum due must be paid within 30 days of the council receiving the invoice, or of its due date if later. Section 68(6) makes any contract term that overrides this ineffective.

What must a valid invoice to a council contain?

Section 68(9) requires the supplier's name, a description of the services, the sum requested and a unique identification number. Add any purchase order or service user references the council asks for, so the invoice is not held.

Can I charge interest if a council pays my care invoices late?

GOV.UK guidance states that statutory interest on late commercial payments is 8% plus the Bank of England base rate, and a lower rate cannot be used in a contract with a public authority. Fixed recovery charges of £40, £70 or £100 also apply.

Does the 30-day payment rule apply to subcontractors?

Yes. Section 73 of the Procurement Act 2023 implies the payment terms into every public sub-contract, so a lead provider must pay its subcontractors within the same 30-day window.

Can TenderLab help us price payment terms into a bid?

Yes. Our pricing work reviews the contract payment schedule, invoicing cycle and the council's published payment performance, so the cost model reflects the working capital the contract really needs.

What is the realistic lead time to engage TenderLab?

Engage us as soon as the tender is published. Requirements mapping, pricing review and evidence gathering run alongside drafting, and earlier engagement leaves more time for independent quality assurance.

Pricing a council care contract? TenderLab supports health and social care providers only, with a 92% win rate across 200+ submissions. TenderLab Ltd, Companies House 17184263. Book a free consultation.

Related reading

• How to price a care tender when the fee rate won't fund the service
• Frameworks, dynamic markets and DPS under the Procurement Act 2023
• Central Digital Platform registration for care providers

Further reading

• Procurement Act 2023, section 68
• Procurement Act 2023, section 69 and section 73
• Charging interest on commercial debt, GOV.UK