Government faces paying interest to hotels due to late payments for accommodating Ukrainians

Integration Minister Roderic O Gorman: It is understood only four officials were working through invoices at one stage in his department — this increased to 20 personnel around Christmas but decreased again. Picture: Gareth Chaney/Collins

The Government is facing paying interest to hotels as a result of late payments to providers which are accommodating Ukrainian refugees.

Hotels, hostels, and B&Bs are owed about €41m from the State as the Department of Integration has acknowledged there is a backlog of invoices that officials are working through.

It has now emerged that due to an EU directive, the State is required to pay interest on outstanding payments as outlined in the European Communities (Late Payment in Commercial Transactions) Regulations 2012.

“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. Interest shall apply until such time as payment is made by the purchaser,” according to the Department of Enterprise.

A spokesperson for the Department of Integration said prompt payment interest applies where significant delays occur on the department’s side.

They said some payments to suppliers are held up because they have not provided the documentation required.

“It is important to note an invoice is only overdue if it is correct for payment but not paid within the agreed timeframe,” the spokesperson added.

They said the department invests "considerable time and effort” in helping suppliers meet the requirements of the Comptroller and Auditor General and that the department cannot pay them until the provider does so.

If a provider sends a flawed, incomplete or incorrect invoice which results in a delay, no penalty applies, the department said.

However, the Irish Examiner reported in recent weeks that hotels across the country were receiving split payments. Mayo TD Michael Ring outlined how a hotelier was paid a lump sum but was still owed money.

Hotels across the country are owed six-figure sums and fears are increasing  the backlog of payments will result in hoteliers deciding to not renew their contracts with the State to accommodate Ukrainians.

It is understood that only four officials were working through invoices at one stage in the department — this increased to 20 personnel around Christmas but decreased again.

Integration Minister Roderic O’Gorman has said repeatedly he has asked for more staff for his department.

More than 700 hotels, hostels and B&Bs are currently providing accommodation to Ukrainian refugees and a total of €564m has been the total spent to date on accommodation and related services for Ukrainians.