Dáil Éireann Debate, Thursday - 21 February 2013
25. Deputy Éamon Ó Cuív asked the Minister for Jobs, Enterprise and Innovation the way he will help small and medium enterprises receive prompt payment from all public bodies employing their services; the regularity with which he engages with other Government Departments and agencies on the issue; and if he will make a statement on the matter. [9085/13]
View answer32. Deputy Sandra McLellan asked the Minister for Jobs, Enterprise and Innovation the steps taken to ensure that small businesses are not adversely affected by late payments by Government agencies. [9054/13]
View answer36. Deputy Sandra McLellan asked the Minister for Jobs, Enterprise and Innovation if he will detail the impact of late payments by Government agencies on the small business sector. [9055/13]
View answer44. Deputy Robert Troy asked the Minister for Jobs, Enterprise and Innovation the action he is taking to ensure that small and medium enterprises are paid promptly by all public bodies employing their services; the way he engages with other Government Departments and agencies on this issue; and if he will make a statement on the matter. [9071/13]
View answerI propose to take Questions Nos. 25, 32, 36 and 44 together.
Prompt Payment for goods and services rendered is critical to the effective working of any economy and is an issue to which this Government is committed.
The reduction in the number of late payments in commercial transactions is one of the ten principles cited in the Small Business Act for Europe as a means to help SMEs to deal with the difficult market conditions currently being experienced and is a principle which this Government strives to adhere to.
My Department promotes improved payment practices and monitors on a quarterly basis the operation of the Prompt Payment of Accounts Act, 1997, and the Late Payment in Commercial Transactions Regulations, 2002.
At Present the issue of late payment is covered by the European Communities (Late Payment in Commercial Transactions) Regulations 2002 (S.I. No. 388 of 2002). Under these Regulations, it is an implied term of every commercial transaction that where a purchaser does not pay for goods or services by the relevant payment date, the supplier shall be entitled to interest (late payment interest) on the amount outstanding.
The Late Payment Directive was recast in 2011 to modernise the law in this area. Ireland must transpose the Recast Directive (2011/7/EU) to repeal the old legislation and modernise the old rules by March 2013. I am happy to inform the House that I signed the Statutory Instrument transposing Directive 2011/7/EU on 22 December 2012 and this will come into effect on 16 March 2013 in full compliance with the Directive’s requirements.
The proposed legislation will act as a deterrent to late payment and as a driver for payment on time by establishing a clear expectation in law that payment will be made according to agreed terms.
In addition to legislating for prompt payments, since 2009, Central Government Departments have been improving their respective payment times and are now obliged to pay their suppliers within 15 days of receipt of a valid invoice. This 15 day prompt payment rule was introduced by the Government on an administrative basis. Departments are required to report Quarterly to my Department on their performance in meeting this target. The latest set of quarterly composite figures published on 30 January, 2013 by my Department show that 98% of payments made by Government Departments, valued at €1.25bn, were paid to suppliers within 15 days.
On 2 March 2011, the 15 day prompt payment rule was extended beyond central Government Departments and rolled out to the Health Service Executive, the Local Authorities, State Agencies, and all other Public Sector Bodies, (excluding Commercial Semi-State bodies), in respect of valid invoices received, on or after, 1 July 2011.
As part of this new extended arrangement, parent Departments are required to publish on their respective websites Quarterly composite reports covering those bodies under their aegis. The individual bodies covered by this arrangement are also required to publish their own Quarterly reports on their respective websites.
These new reporting arrangements will ensure that Ministers will be able to monitor the performance of the bodies under their aegis and will enable them to address any issues with those bodies who are not meeting obligations in respect of prompt payments.
The Government will continue to pursue work in this area which is critically important to the cash requirements of business. The Action Plan for Jobs 2013, which is currently being developed and will be published shortly, is a key element in the Government's policy approach to rebuilding the economy and getting people back to work. It will continue to build on the recent achievements by driving the 15 day payment period across the public sector and enhance the ability for business to attach officially new payment requirements to relevant invoices. It will also deliver on enhanced working relationships with representative bodies to ensure that business is fully aware of developments in this area.
