Debate contribution: Public Sector: Late Payments

Debate contribution by Ms Diane Forsythe on 10 September 2024.

MLA

Ms Diane Forsythe

Party at the time

Democratic Unionist Party

Date

10 September 2024

Type

Debate contribution

Business

Private Members' Business

Heading

Public Sector: Late Payments

Assembly identifier

Official Report component 4517834

Read the official Assembly record

Text

Thank you, Mr Deputy Speaker. I thank everyone who contributed today, and I echo all the points that were made at the beginning by my colleague Paul Frew. As an accountant who has worked across the private sector and the voluntary and community sector, I have lived and breathed the impact of this issue. I am acutely aware of the extreme pressures that the late payment of invoices has on operational cash flow. It is bad enough when that is within the private sector, but when it is government that is late paying invoices to our small and microbusinesses, it is absolutely unacceptable. To put it further into context — this has not been widely spoken about today — it is generally standard practice in government-awarded contracts to the private sector that the service provider will be out of pocket for the cost of its staff salaries and supplies in order to deliver the work under the contracts, and it will invoice in arrears after a number of months to receive the money back. Therefore businesses are already well out of pocket by maybe tens and hundreds of thousands of pounds before the invoice is issued for government to pay them. That already pushes many small and microbusinesses out of the market, as they do not have the reserves or overdraft facility to allow them to bid for the work. When the businesses are significantly out of pocket and invoice, they then have to wait a further 30 days for a target payment by government. That puts even more pressure on them. Following that, for government to miss the 30-day target is horrific for the businesses, especially when it is often only on a technicality. That is putting people out of business. The reputation of government in paying that way spreads, and many small businesses and voluntary and community sector organisations stay away from bidding for those contracts because they have seen what happened to others.

The consequence for our government procurement system is that with fewer competitors able to bid for those contracts, we see less value for money in the awards. That is unacceptable, and we need to see an end to that culture and appreciate the impact that it has.

We support the amendment, as we want to see all public-sector bodies taking this approach, although we recognise the problem that the Finance Minister faces with regard to control over local government. Nevertheless, we appreciate her commitment on the issue. I thank David Honeyford for his contribution, and we look forward to his private Member's Bill on the topic. Deirdre Hargey welcomed the Finance Minister's work to date with the FSB, and I echo those thanks. It is good to see our Finance Minister's commitment on the matter. I congratulate Colin Crawford on his maiden speech and welcome him to the Chamber: it is great to see him here. He spoke about the ripple effect of late payment on other bodies and companies and how the public sector should lead by example. Sinéad McLaughlin spoke strongly about how we should take today as a chance to reaffirm that Northern Ireland is a small-business economy and do what we can to emphasise and support that. My colleague Joanne Bunting raised the specific issue of legal aid, which is important, and highlighted evidence that was given to the Justice Committee. It shocked me to know the detail of some of that: taking 12 to 16 weeks to make legal aid payments for services provided a year prior is just unacceptable. The evidence from the Law Society and the Bar Council saying how that was putting people out of business and costing Northern Ireland the provision of legal aid and putting our justice system at risk really brings to light the wider impact of this situation. I thank our Finance Minister for coming to respond to the debate. I welcome her commitment across the issue, and I look forward to seeing the new procurement regulations coming through the Finance Committee. Again, I am grateful to see her engagement with the FSB on the issue. I reiterate the point that I made with regard to the shared service data. The percentages that are being paid within targets look relatively high, but what is not captured are the businesses that are not doing business with the public sector because they have either been priced out or do not have capacity or they have had a loss of confidence as a result of late payment for their services and do not engage currently. We believe that government bodies should pay their invoices on time and in full, if not early, where possible. We support the Minister in any action that she will take to move this forward. Let us be professional, ambitious and prudent. Let us support our local businesses and their employees by agreeing the motion.

814 words. Text as published by the Northern Ireland Assembly.

Assessment

Not flagged

Jev’s structured answers

Assessed 21 October 2026 at 11:03 UTC by jev-1.13.0 (requested as typesafe/jev) under rubric 2026.10-r9, methodology 1.9.

Disagree with this assessment?

Classifications can be challenged. A person reads every challenge, and any change is recorded publicly above with its reason.

Challenge this classification