Prompt payment rule to expand

THE Government is to extend its prompt payment to businesses rule beyond its central departments to include the HSE, local authorities, state agencies and other public sector bodies.

Small Business Minister John Perry announced the move yesterday, on the back of the publication of figures for the first quarter of the year that showed that nearly 98% of outstanding Government payments to business suppliers are being made within 15 days.

The promptness in payment runs across all departments, with 12 of them paying more than 92% of invoices within the 15-day period.

All 15 departments had paid between 93% and 100% of their invoices within 30 days.

Mr Perry said the Government’s perform-ance now puts the onus on the broader public sector to “match this lead and play its part in assisting SME suppliers”.

Mr Perry said: “All the public sector bodies concerned are obliged to publish their performance in meeting the 15-day prompt payment period. This will be on a quarterly basis and will be similar to the details published for the central departments.”

ISME chief executive Mark Fielding said it was “a step in the right direction”.

“For too long now, the state agencies — in particular, the HSE and local authorities — have been among the worst offenders when it comes to delaying payment to small businesses, with many companies waiting three months or more to get paid,” he said.

“Many SMEs are being put to the pin of their collar due to not getting paid on time, with the consequent cash flow issues that arise. It’s essential that, as observed by Minister Perry, big business takes the lead of the state and immediately starts improving payment performance to their small suppliers,” he added.

If no improvement is seen, Mr Fielding said, then the Government should introduce a 30-day mandatory payment period for the entire private sector, “with serious consequences for companies that fail to comply”.