On the Vote, the Comptroller and Auditor General is correct that the buoyant economy has helped on the overall outturn. A lot of effort over the years has gone into addressing the unemployment problem and trying to help people to get back into employment. There have been some individual savings as well on certain subheads, some of them caused by buoyancy, others caused by late or slow draw-downs from particular areas where it is difficult to anticipate the precise outturns that might be required. Supplementary Estimates generally address those but in IDA Ireland we had a supplementary estimate to reduce the overall Vote in that area. Similarly, in Enterprise Ireland there were delays in drawing down certain funds.
On the special report on prompt payments, the Comptroller and Auditor General's report is very useful to us in trying to review our current policy but, more importantly, in helping us to decide how to address the implementation of the EU directive which will extend to the general community the rules, obligations and practices of prompt payment. The Comptroller and Auditor General is right to draw our attention to deficiencies in the reporting structure. However, we feel the way we will address this might require changes in the design of the Act, in sections 12 and 13.
Fundamentally, we feel we should protect small suppliers from large purchasers. The State is a very dominant purchaser in the economy and it has a lot of power. The position for very small companies supplying to the State was one of weakness and it was important to introduce this Act to protect them. The Act has helped to improve the practice of payment in society. There is a 45 day rule in the Act. The EU legislation will reduce this to 30 days, which is similar to the rule in the UK, and it will expand it to all suppliers within the State. For that reason, we will have to consider how best to ensure its practice. We are looking to the review group on auditing and the proposals it has about looking at positive statements of compliance from auditors about practices within organisations.
We feel strongly that thede minimus rule is needed. The Comptroller and Auditor General is right that the Act does not allow for de minimus thresholds at the moment but clearly the de minimus rule, for administrative convenience and efficiency, probably is needed and we would intend to apply that to the Act. Then we need a way of periodically reporting on what payment practice is within our society, not only by the State but in the wider society. That is where the Department is coming from with this Act. In the UK, private sector credit agencies usually provide information about average payments and look at various large purchasers. Maybe we can encourage such an outcome when we move forward. Alternatively, the Department might need to sponsor or fund periodic statements and surveys of payment practice within the various organisations both in the State sector and outside it.
One of the defects of the Act was that it allows reporting on payment practice to be done by one of two means, either through the annual reports of organisations or to be sent into the Department where we batch them and publish them through the Dáil. It is a very ill-focused and ill co-ordinated system of reporting on the practice of payments and clearly we will need a new mechanism. We have written to all the Departments to find out from them which of their agencies use 12.1 or 12.2, in other words, their annual report or other reports as the means of promulgating information. I accept it is not an adequate mechanism so we have to find new mechanisms. We hope to find these in the context of legislation that will be used to implement the EU directive.
With regard to legal interpretation, the Comptroller and Auditor General is right that there have been differences of legal opinion in a number of areas. He has suggested to us that we go to Government to confirm the relationship of transactions between State companies. We have been reluctant to do this because we are getting legal advice which says our interpretation is correct. However, from an effectiveness point of view and to be sure, as it were, we intend to go to Government and seek its approval to confirm the nature of transactions between Departments.