Late payment of bills could land Bradford Council with costs of up to £1million, Liberal Democrats claimed.

Under new regulations introduced last month to protect smaller firms from bankruptcy due to late payment of bills, businesses with fewer than 50 employees have been able to charge interest of 15 per cent on outstanding debts.

But a study by the Audit Commission showed the authority only pays 82 per cent of its bills on time.

Leader of the Bradford Council Liberal Democrat group Coun Jeanette Sunderland said the new law was a step in the right direction.

But she said the Council paid around £40million in bills to business and the costs to the Council of the new regulations could be huge.

"We are concerned that the Council may not have grasped the implications of the new law," she said.

"If it continues to pay bills at the same tardy rate then we could be facing interest charges of up to £1m which is potentially an extra £7 per council tax payer.

"We want to know the true cost of the legislation on taxpayers and what provisions the Council has made."

Council leader Councillor Ian Greenwood dismissed the claims as 'pure speculation'.

"We are not complacent about the issue, we know there is room for improvement and all directorates are looking at ways of increasing the number of bills paid on time," he said.

"In the vast majority of cases Bradford Council does pay its bills on time and we believe our record of payment compares very favourably with many other large authorities across the country.

"Councillor Sunderland's claims that slow payment could cost the authority £1million are pure speculation and are based on the completely unrealistic assumption that all unpaid bills relate to small businesses."

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