Subcontractors: Prompt Payments

Oral Answers to Questions — Finance – in the Northern Ireland Assembly at 2:00 pm on 8th November 2016.

Alert me about debates like this

Photo of Edwin Poots Edwin Poots DUP 2:00 pm, 8th November 2016

3. Mr Poots asked the Minister of Finance how his Department ensures that the main contractors on public-sector contracts are paying subcontractors promptly for their work. (AQO 598/16-21)

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

It is public procurement policy that first-tier subcontractors are paid within 30 days, and the Central Procurement Directorate (CPD) has implemented a range of measures to ensure that subcontractors are paid promptly.

Most recently, this has included the successful rollout of project bank accounts, as the Member will be aware. However, it also includes other practical measures, such as a requirement for project managers to monitor subcontractor payments at monthly progress meetings with the contractor. There is also a requirement for the client, main contractor and subcontractors to honour payments as they fall due by signing a fair payment charter.

Photo of Edwin Poots Edwin Poots DUP 2:15 pm, 8th November 2016

Thank you, Madam Principal Deputy Speaker. I apologise for not being in my position for a question yesterday.

The Government's record in ensuring that main contractors are paid quickly is good, but I think that main contractors are using subcontractors for banking purposes. You mentioned project bank accounts, which I think are used in a very limited way in the maintenance sector in particular. On the maintenance sector, will the Minister give us some assurance that subcontractors will be paid promptly by the main contractors and that people will not be out hundreds of thousands of pounds for several months when others have already been paid by the Government for the work carried out?

Photo of Caitriona Ruane Caitriona Ruane Deputy Speaker

I thank the Member for his apology and remind him that questions are supposed to be brief and to the point.

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

I, too, thank the Member for his supplementary. This issue of payment to subcontractors and those farther down the line has really been in use since the Celtic tiger collapsed and a lot of people were left in the lurch. It has come up on my watch on several occasions, so there are a lot of people concerned about this, especially where public money is being spent. Our purpose when carrying out infrastructural investments is that we get the money paid promptly to the main contractor, but we want that money to be cascaded down through the entire value stream and worker stream of the contract. I want to make sure that that happens. Patsy McGlone had a separate meeting with me as the head of the all-party group on construction, and we touched on this issue and the issue of retentions. The Member will know that it can sometimes be a burden on those farther down the work chain if they are waiting for retention money when it does not really make much sense. So, yes, I think that, with public money, we are good at making sure that we have the right impact and that people are paid promptly, but I am happy to look again at the maintenance side if the Member thinks that we are perhaps not just as efficient as we would like to be in that sector.

Photo of Steve Aiken Steve Aiken UUP

Will the Minister seek to publish the payment guidelines and the timing of major payments across government that are made within 30, 60 and 90 days? I understand that that is practice in GB, and it would go a long way to helping people to understand whether Government are making prompt payments and further payments downstream.

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

Mr Aiken, I am very happy to encourage that to happen if it is not at the minute. I have met the key group from the construction industry at least twice. I have gone out to visit some of the representatives, including those from the quarry industry, on-site in Maghera and east Belfast. In concert with Executive Ministers, I am resolved to, first, make sure that we green-light, start and deliver projects. The other thing is that we need to get the money spent. I would like to encourage anything that helps transparency in that. I think that the industry accepts that there is really no sense at all in our trying to provide an economic stimulus to the construction sector by green-lighting projects if the money is not then spent and allocated promptly.

Photo of Declan Kearney Declan Kearney Sinn Féin

A Aire, ar an ábhar cheannann chéanna agus a thóg Edwin Poots, an dtiocfadh leat cur síos ar na smachtbhannaí a chuirtear i bhfeidhm ar na comhluchtaí nach n-íocann fo-chonraitheoirí s’acu in am? Minister, building on Edwin Poots's question, can you explain to us what sanctions are in place for firms that fail to pay their subcontractors in good time?

Photo of Máirtín Ó Muilleoir Máirtín Ó Muilleoir Sinn Féin

Cinnte. Bless you to the Chair of the Committee as well. Glacann mo Roinn agus an Coiste Feidhmiúcháin an-dáiríre le comhluchtaí nach n-íocann a gcuid fo-chonraitheoirí in am. Feictear seo sna hiarmhairtí do ghnólachtaí a ghlacann páirt i gcleachtas den tseort sin maidir le conarthaí Rialtais, nó d’fhéadfaí teastas míshásúil feidhmíochta a bhronnadh orthu. D’fhéadfaí go gcuirfear cosc ar na gnólachtaí a fhaigheann a leithéid de theatas cur isteach ar chomórtais soláthair phoiblí ar feadh tréimhse nach faide ná trí bliana. The failure of a firm to pay its subcontractors promptly is a matter that the Executive and my Department take very seriously. The ramifications for firms that engage in such practices in government contracts reflect that, as they may be issued with a certificate of unsatisfactory performance. Receipt of that certificate can result in a firm being excluded from public procurement competitions for up to three years.