Ciarán Lynch (Cork South Central, Labour)
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Question 85: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the steps taken to ensue compliance by Government Departments with the new arrangements announced on 20 May 2009 to reduce the payment period by central Government Departments to their business suppliers from 30 to 15 days; her plans to extend this arrangement to semi-State companies; and if she will make a statement on the matter. [41062/09]

Mary Coughlan (Donegal South West, Fianna Fail)
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The Secretary General of my Department wrote to all Government Departments on 26th May, asking them to take the necessary steps to implement this commitment and to ensure that Department line staff and Finance Units are made aware of the need to prioritise payments to suppliers to meet the 15 day deadline.

The Government Decision of 19 May included a requirement for Departments to report quarterly to my Department on their performance in meeting these requirements. These reports are to be submitted by the 15th day of the month following the end of the quarter. The first such reports were due by 15 October 2009. Departments are also required to include information on the implementation of the measures in their subsequent Annual Reports.

As a result of the above measures, Departments are required to give greater priority to making timely payments and to ensure that suppliers themselves are aware of how they can assist the process by meeting the requirements of Departments in relation to the submission of invoices.

My Department is currently in the process of collating the first returns received from Government Departments. An initial examination of returns received for payments made by Government Departments during the period 16 June 2009 to 30 September 2009, shows that the majority of these were made within 15 days.

As part of the Government Decision of 19th May, the Government also stated that an assessment would be completed of the impact of extending this requirement to the local authority, health and education sectors and this remains under review. Organisations within the sectors are committed to meting their current payment periods. Suppliers experiencing difficulties in securing timely payments should, in the first instance, contact the relevant section within the organisation with which the contract was agreed.

The application of the 15 day payment period requirement does not extend to semi-state companies but semi-state companies too are already committed to meeting their current payment periods.

My Department has made an arrangement through the auspices of the Credit Supply Clearing Group, whereby representative bodies of the SME sector can bring to the attention of the Clearing Group, individual cases of late payments by semi-state bodies which are adversely impacting on the cash-flow/working capital of SME's. Under this arrangement, my Department will have such late payment practices examined by the parent Government Department involved and reported back on to my Department.

In the light of the above arrangements, I anticipate that compliance with the new procedures, should improve overall cash flow to suppliers, including in particular for small and medium enterprises.