One in three payments from the public sector to businesses are being made late, according to a comprehensive survey by the Federation of Small Businesses (FSB).

The research reveals that government and its agencies are still paying small businesses late despite making commitments over a year ago to pay within 10 days.

The report found that local government is likely to pay one in four invoices late, and central government and government agencies make one in three payments late.

"It is shocking that after the government put the Prompt Payment Code in place so many businesses are still being paid late. The public sector needs to take the lead in more than word alone and set an example that paying late isn't acceptable, as this problem persists in the private sector," said John Wright, national chairman of the FSB.