I beg to move

That this Assembly believes that businesses and traders who supply goods and services to the public sector should be paid on time and in full; recognises that late payments can negatively impact on cash flow and cause undue stress for business owners and their employees; notes with concern the findings of research published by the Federation of Small Businesses (FSB) in 2023, which found that 56% of small business owners and the self-employed in Northern Ireland had experienced late payment in the past three months; further notes that Northern Ireland was jointly the worst affected region; is concerned that the reasons for late public-sector payments generally remain unreported; highlights the need for enhanced reporting by all public bodies in order to improve accountability in this area; calls on the Minister of Finance to introduce a new Executive target for payment of at least 90% of invoices within five days for work completed; and further calls on the Minister to work with Executive colleagues to agree fresh measures to ensure 100% of valid invoices are paid within the 30 calendar day statutory limit.

The Business Committee has agreed to allow up to one hour and 30 minutes for the debate. The proposer of the motion will have 10 minutes to propose and 10 minutes to make a winding-up speech. As an amendment has been selected and published on the Marshalled List, the Business Committee has agreed that 15 minutes will be added to the total time for the debate. Paul, please open the debate on the motion.

Thank you, Mr Deputy Speaker. Local businesses play an integral role in the delivery of front-line public services in Northern Ireland through the provision of goods and services. They ought to be recognised and valued rather than exploited. Late payment has a serious impact on cash flow among businesses in Northern Ireland and disproportionately impacts on small and medium-sized firms. Coupled with high interest rates and the knock-on effect on loans and credit, as well as rising input costs, it is an inescapable fact that the failure to pay small businesses on time and in full puts many to the wall.

Previous research found that, compared with larger firms, twice as many small businesses have less than three months of cash reserves and therefore have less of a cushion to absorb disruption to cash flow. We know from research carried out by the Federation of Small Businesses and other organisations that close to a quarter of a million public-sector invoices were not paid within the legal requirement of 30 calendar days in 2021-22. That spans a variety of sectors and professions. We know, for instance, that barristers took industrial action last November because of delays in paying legal aid. That is just one example. When it comes to short-term experience of late payment among small business owners and the self-employed, Northern Ireland is jointly the worst affected region of the United Kingdom.

That is not a defensible or credible position. Increasingly, there is a concern that delays in payment are being utilised as informal policy to ease cash flow problems in Departments and public bodies, given the perilous state of the public finances. Any such approach is totally and utterly unacceptable.

Governments are not businesses. Sometimes I think that they would operate better as businesses, but they are crucifying our small businesses because they will not pay in time. It is not enough for Departments to publish the rate of late payments that are within their remit; we need to know the reasons for that so that future interventions to address the problem are informed, fair and effective. We need to dig deep into the psyche of our Departments. Resistance to addressing that challenge has far-reaching impacts that are well beyond the viability of individual businesses and the health and well-being of the traders that are impacted. A late payment culture has a negative impact on the willingness of local firms to engage in future tendering and procurement processes. That means that ratepayers potentially lose out on benefiting from the best possible bang for their buck and the most effective and efficient approach to a service. If we are serious about investing in public services that are fit for purpose, the Minister of Finance needs to deliver on the expectation of prompt payment. There should be a rapid review of current targets and reporting requirements in order to refresh the Executive's approach and ensure that there is a clear impetus for portraying more effective performance in that area. As part of that process, the DUP believes that the Department of Finance should engage intensively with the FSB to progress the recommendations in its 'Never Better Late' working paper.

The UK Government previously revised their prompt payment target for government buyers to 90% of undisputed and valid invoices from small and medium-sized enterprises within five days from the previous 10-day threshold. The Minister should look to replicate that step in Northern Ireland in order to instil confidence in the business community that the Executive are serious about increasing their ambition in that crucial area. I will go as far as saying that there should be legislative change to force Departments into a prompt payment process that is much more rigorous than that which the Departments have hitherto enjoyed.

I have working experience as an electrician in the construction industry, which is an industry that has been dogged by late payments. Some of the companies that I worked for no longer exist because companies withheld payments. Cash flow is king. If you are sitting on reserves of only three months but have been awarded a massive contract, you think that you are getting bigger, but if that massive contract does not pay out in time, you are in trouble. For so many companies, the trend and practice is to say, "We will not grow. We will not get bigger. We will not go after those big contracts". That is because the dangers and risks that are associated with late payment for the bigger contracts are just too much. The companies just will not do it. A lot of our companies that could be thriving and striving stay small deliberately. That is the opposite of what the Government are trying to create. Is it not perverse that a Department in this place sponsors an organisation like Invest NI to create jobs while withholding payments to companies? If you say that you support business, you should do it. One small change in the way that we pay companies that provide a service could make all the difference before you even put any money into the budget line of Invest NI. Why are we not doing it? Why are we withholding payments? If we find that Departments are doing that to assuage the pressures on their budgetary requirements, that is really important, and we must get to the bottom of it. The Assembly must investigate it thoroughly to ensure that practices that should not happen do not happen, but I fear that they do. I fear that, somewhere along the line, Departments are withholding payments not because of testing work or whatever but because it is better to have the money sitting in their accounts or coffers for a wee while longer than it going out into the private sector. It is crucifying businesses. We are losing jobs and livelihoods. We are putting companies to the wall, not because of the volatile nature of business or the environment in which those people work, operate and sell but because government is destroying those businesses. I cannot tolerate that or abide that practice, if it is happening.

I come from the private sector and the real world. This place can have an impact on the real world. Will that impact be good or negative? Late payment to people who have provided a service is absolutely despicable, yet that is what we are experiencing. Why is that the case? I cannot think of a valid excuse for Departments not paying on time for work that has been completed. It does not make sense to me. My mind does not allow it to compute. Whilst I always say that the Governments should be more like business, I want to see them supporting business in that area. So far, the practices and legacy are shameful.

I beg to move the following amendment:

Leave out all after "Executive target" and insert: ", covering Departments, their agencies and arm’s-length bodies, and local government, for payment of at least 90% of invoices within five days for work completed; and further calls on the Minister to work with Executive colleagues to agree fresh measures to ensure that 100% of valid invoices are paid within the 30 calendar day statutory limit, with the same prompt payment requirements for subcontractors and suppliers enshrined in the terms of all public-sector procurement."

You will have 10 minutes to propose and five minutes to make a winding-up speech on the amendment. Other Members who speak will have five minutes.

Thank you, Mr Deputy Speaker. I declare an interest that I am a member of the Federation of Small Businesses, which is in the Register of Members' Interests.

I do not often stand here and thank DUP Members for tabling a motion, but I thank Paul and Diane today. Paul said about people not engaging with the federation. It is a pity that they did not engage with it before tabling the motion, because we could have tightened it up to make it a little bit stronger.

I have been working on a private Member's Bill (PMB) about this issue for small businesses for quite some time. The debate is perfectly timed, because I am meeting the Minister tomorrow, and it is great to have the view of the House. I thank her for being here to listen to those views.

I want to quickly thank Neil from the Federation of Small Businesses for all the help and support that he has given me through his engagement and through bringing the evidence base to see what we can do in this place to get results. The federation has been brilliant about helping with that. Thank you.

Paul said that he has a background as an electrician. I come from a small business background. I am passionate about creating jobs and opportunities for our economy to grow and supporting our business community by creating the conditions and opening up opportunities to enable them to scale up and grow further. I am passionate about the issue that we are debating.

I started my first business when I was 20. Before I came to the Assembly, I loved the cut and thrust of small business, the people I met along the way and the thrill of working on a new contract, negotiating on price, whether or not you were winning or losing, and developing new ideas and products. The downside for every small business in Northern Ireland and elsewhere is cash flow and getting paid. I have been there, and I have lived it. Spending Monday morning checking the bank account to see what needs to be paid that week and what salaries have to go out that Friday is the routine of every small business in Northern Ireland. As your business grows, those numbers get greater, and so does the amount for which you have invoiced, the amount that you are waiting to get back and the amount of pressure on you. Quite often, people have signed indemnities on their houses and everything else to guarantee payments, and all that pressure mounts on people.

Most small businesses here do not have accounts departments, so, when you spend time in your working week trying to chase money backwards for work that is completed rather than looking forwards at work that you need to do, it is time wasted and stress caused. When it is coming from the public sector, it is so not necessary. Your headspace should be focused on growing and developing the business, getting new business and increasing jobs in our society, not being distracted by the pressure of cash flow. Simply, the public sector should not be adding to that burden. When money is there, is allocated and is waiting to be paid, and when the job is completed, the public sector should be helping business with cash flow by paying it quickly.

It is our role in the Assembly to set the scene, to create the pitch for others to play or to be the gardener who creates the conditions. A gardener does not actually grow the plants, but they remove the weeds, tend the soil and fertilise and water the plants. The better the conditions and the better the conditions that are created, the better the plants grow all by themselves. That analogy is what I want to use for what we should be doing for our economy here and with this issue of prompt payment.

A self-employed small business owner will grow their own business all by themselves, but it is our role to create the very best conditions to help them, to give them the best opportunities and to give advantage to local companies and the people who work here. The Alliance Party will always prioritise growing our economy, creating new green jobs and creating skills and export opportunities and the benefits that flow from that. However, every business can be stretched with its cash flow. When payment of invoices is delayed or slow to come in, you struggle to pay out your own invoices and accounts to the other side. Again, the public sector should not be adding to that problem. We can help business by providing a positive cash flow position.

The amendment is to strengthen and widen the motion to reflect what is actually happening and the problem that is out there. This has to include all the public sector. It has to include local government and the arm's-length bodies such as the Education Authority and the Housing Executive, to name just two. There are three areas that I am looking to cover in my PMB that aim to transform the situation. First, it is absolutely vital that all procurement contracts include in the terms and conditions down the supply chain not just the main supplier of the tender but its subcontractors. A company that wins a government contract should be paid quickly, but also the terms of awarding that contract should include in the procurement contract that the main contractor must pay its subcontractors within the same terms and conditions. That condition is legislated for in the UK Procurement Act 2023, but we are not seeing that borne out in practice. The days of the main contactor in government contracts getting paid within 30 days or less but taking 90 days or 120 days to pay the people who supply the work have to end.

I will give an example. I spoke with this person this morning to follow up with them on what I was going to say here. Last summer, I dealt with a constituent of mine who owns a small business, working for the Housing Executive. He has six employees. The main contractor that held the Housing Executive contract was getting paid quickly, within the 30-day period, but my constituent was waiting 90 days to be paid. Basically, the main contractor was cash-flowing his business at the expense of the very people who were doing the work. When the main contractor went into administration, my constituent carried the can for four months of work that was not paid for. He is not alone in that, and that has been repeated, specifically with Housing Executive contracts, over a period of time. That brings job insecurity to local people who are getting up every morning and working hard, and it brings heartache and worry to small business owners. Ultimately, that guy lost his business. This has got to stop.

How many large contractors working on government contracts have done just that and taken the self-employed and the little guy out?

I will just note two other items in my PMB that I did not add to the amendment but want to reference. As I said, public-sector invoices are paid in a legal time frame of 30 calendar days, but, if public-sector invoices are not paid within the legal time frame of 30 calendar days and there is no dispute on the invoice raised, interest payments are automatically applied. The Late Payment of Commercial Debts (Interest) Act 1998 allows suppliers to add interest. In practice, that never happens. There is concern about losing further orders. Once you are in and you work for one month, then it is two months, and then it is three months, and you have paid your staff, your vehicle costs, your insurance and your suppliers. Small businesses become completely dependent on the main contractor, and they are completely trapped by what the main contractor does. That has to end. I want to look at swapping that around and making the interest payment compulsory for the public sector, so that it would automatically be paid with a late payment if the payment was delayed. That would stop it happening again. The invoice would be paid with interest if the delay was the fault of the public sector.

The final point is for public sector prompt payment data to be properly recorded and published. If those three points were implemented, you would start to solve the issue, and payments would flow to our small businesses. I trust that everybody will support the motion and the amendment, which, I trust Members will agree, strengthens it.

I am also pleased to speak on the motion. It is vital that our businesses and traders are paid promptly and in full when working with the public and private sectors. Government has a duty to set an example to all industries by ensuring that invoices are paid as soon as possible. The prompt payment of invoices is particularly important when working with small businesses in order to ensure that they can maintain their proper cash flow and, importantly, pay their employees and suppliers. The previous Finance Minister, Conor Murphy, provided an important intervention in that regard when, during COVID, he instructed all Departments to continue paying suppliers who provide goods and services for which the demand had been reduced or paused temporarily.

Our small businesses are the backbone of our economy, crucially, along with the role of labour and, importantly, our workers. Proper and prompt payment is the least that they should expect for the services that they provide. Minister Caoimhe Archibald has been working closely with the Federation of Small Businesses to ensure that that is the case. Indeed, the federation has been quick to thank the Minister and her officials for the work that she has done on the issue.

While there is always room for improvement, it is worth noting that the Executive Departments are largely meeting their payment time frames, and payments are being made much more quickly, when compared with those coming from trusts, arm's-length bodies, councils or other agencies. Indeed, central government is performing well in paying invoices on time. We need to focus on areas of improvement, but let us not forget the contribution that those services and procurements make to society, our economy and those small businesses.

Annually, we procure over £3 billion in local services. While that money is going directly into those businesses to the supply chains, importantly, it is recruiting workers to our workforce as well. That adds to infrastructure, training and investment. Importantly, if we can do more to align that to social value, what role can the bedrock of our economy play in doing more to lift up all people in our economy? We should not forget that the economy should work for the people, rather than people working for the economy. That does not mean that we should be complacent. Setting targets can only increase accountability and act as a signal for other industries that they should do the same.

I commend the Minister for the work that she has been doing so far and the engagement that she has been having with key stakeholders, particularly those relating to our small businesses. I support the motion.

This is Colin Crawford's first opportunity to speak as a private Member, so I remind the House that it is convention that a maiden speech be made without interruption.

As I give my maiden speech today, I do so with a mixture of excitement, fear and humility, as well as knocking knees and shaky hands.

First, I pay tribute to my predecessor, Mr Robin Swann MP. From being elected to this place in May 2011, Robin served the constituents of North Antrim consistently and with steadfast determination and loyalty. There is no doubt that I have big shoes to fill, or not so big. I wish Robin well as he takes up his new role in Westminster and wish him, his wife and his two kids God's richest and warmest blessings for the future.

Over the past few weeks, there have been many reports and much speculation about the new Ulster Unionist MLA for North Antrim. For those who do not know me, my name is Colin Crawford. I am a proud Ballymena man through and through. I was born and raised in Harryville and want to make special mention of my two amazing parents, parents who have made countless sacrifices along the way to help shape the man I am today. I publicly thank my mum and dad, family and friends for all their continued encouragement and support, particularly over recent weeks.

Before coming to Stormont, I worked for Northern Ireland's foremost bus builder, Wrightbus. Prior to that, I worked for Firmus Energy, and I bring with me real-life experience of the voluntary and community sector. Although I am only 39 years old — I kid you not — and some may think me inexperienced, I assure the amazing constituents of North Antrim that I am 100% focused on and dedicated to representing them as their Ulster Unionist MLA, and I look forward to meeting as many of them as possible over the weeks and months to come.

Small to medium-sized enterprises are crucial to the Northern Ireland economy, They play a vital role in the supply chain of large manufacturers such as Wrightbus and are crucial to our voluntary and community sector. Late payment of invoices is a major source of unnecessary stress for those trying to operate such businesses. Late payment often causes a ripple effect down the supply chain, amplifying the problem. The Ulster Unionist Party, as per its local government manifesto in 2023, committed to acting to ensure that public-sector organisations such as schools, hospitals and Departments paid their bills promptly in order to alleviate such stress. We must say clearly to government suppliers that they must pay their supply chain on time or face losing future government contracts. It is only right that we say to the public sector that it must lead by example and make sure that suppliers are paid on time. The difference between waiting 60 days and waiting 90 days can make or break many small companies, so it is vital that the private and public sectors work better in that regard.

I am pleased to support the motion on behalf of the Ulster Unionist Party.

Some Members:

Hear, hear.

Thank you for your maiden speech, Colin.

I add my congratulations to you, Mr Crawford, on making your maiden speech in the House. We will hopefully hear from you many more times during the mandate.

The issue of late payments to small businesses is important. It has been said many times that our small businesses are the lifeblood of our economy and the backbone of our high streets. In Derry and across the North, small businesses generate wealth. They keep our towns and cities moving by providing crucial employment and opportunities and driving economic progress.

We are a small business economy, and today is a chance to reaffirm that. Those businesses have faced enormous challenges in the past few years. From the uncertainty of Brexit to the shock of COVID and the cost-of-doing-business crisis, they have weathered the perfect storm in recent years. We also know that businesses, in the midst of all those challenges, face issues that have gone unaddressed for far too long, including late payments. The Federation of Small Businesses has outlined the scale of that challenge in recent years, and Neil and his team have told us about small businesses that have been impacted by late payments: businesses that have run into cash flow difficulties; businesses that have been pushed into taking on debt; and businesses that have been put out of business altogether. I am familiar with all those issues.

As a previous CEO of the Chamber of Commerce in Derry, I positively campaign to support good payment practices from business to business and to highlight the importance of responsible and sustainable payment practices in the public sector. Unfortunately, we have never been able to achieve the ambition of eradicating late payments. I have seen first-hand the huge toll of late payments on those who run small businesses from the impact of significant stress and worry about loss of livelihoods. It is not just a pressing issue for the economy but a real mental health challenge for dedicated entrepreneurs who should be able to focus on running their businesses free from that stress. It literally keeps people awake at night and overcomes them, not allowing them to be innovative and creative in their business, because they are consumed by where their payments are coming from.

The problem is by no means unique to Northern Ireland, but we should be absolutely clear that there is no excuse for the scale of late payments that we see in our economy. As the FSB has argued, while it may be more difficult to solve the issue in the private sector, it is totally unacceptable for government to pay so late. From Departments to health and social care trusts and, indeed, councils, throughout public service, there is simply too much evidence of payments not being made on time. Other Members have outlined the scale and depth of the impact of that. In 2021-22, almost a quarter of a million invoices were not paid on time, inside the public-sector legal requirement of 30 days. While specific data for Northern Ireland is limited, data from across the UK suggests that the entire economy could be boosted by about £2·5 billion every year if small businesses were promptly paid.

I hope that the Executive can, at long last, tackle the challenge for the benefit of our small businesses and, indeed, the economy. I would fully support the Executive's introducing legislation at the earliest opportunity, and I would be supportive of a private Member's Bill as outlined by David Honeyford. We need to support our small businesses on the issue, and, like many others, I call on the Executive to do so. I would also like to see public bodies produce plans on how they will meet the legal obligations placed on them. That is the very least that we can do and that businesses deserve. Today is a chance for us to make that case and call on the Executive to make the changes that are needed.

I am grateful to colleagues for tabling the motion. I declare that I have an immediate family member who works in the legal profession.

I will bring forward a matter relating to the topic that has been raised with members of the Justice Committee. As part of our induction into all things justice, the Committee heard from directorates in the Department and various stakeholders from the justice family. In the course of those sessions, we heard evidence from the Law Society and the Bar Council, which stated that the Department takes between 12 and 16 weeks to make legal aid payments for work that has been completed.

Evidence from the Department naturally outlined the existing financial pressures. As part of the discussion on the legal aid issue, officials indicated that the time frame was necessary and, indeed, was being used as a budget management tool. In briefings prior to the restoration of the Assembly, justice spokespersons were advised that, at various times, the Department was having to eye a six-month time frame for payments, again as a result of demand and pressures and for the purposes of managing the budget.

The Law Society and the Bar Council were very clear about the impact of such delayed payments. The Law Society cited that it can have massive consequences for cash flow, particularly for small businesses, which most solicitors' firms are. Such delays can literally be the difference between firms remaining open or having to close their doors, resulting in unemployment in local areas and further vacant premises on our high streets. That is not just a city problem: it is widely felt in rural communities. Likewise, the evidence that we received from the Bar Council indicated that delays in payment had resulted in numerous barristers leaving the profession entirely, particularly younger women.

The problem is compounded because payment rates for work have not been reviewed for decades. As a result of that area of law being so unprofitable, many firms no longer do legal aid work at all. Hence, very few students wish to enter the area of legal aid law because it is not well paid and the hours are extremely antisocial. Moreover, even when there are willing students, most firms do not have the resources to take on apprentices from the Institute of Professional Legal Studies because they cannot afford to pay them. Unless people have a placement, they are not accepted into the Institute. Thus, the future of legal aid representation in Northern Ireland, in the long term, hangs in the balance.

Traditionally, the House has not had much sympathy for the profession or some of the expenditure on legal aid. Some of that criticism is justified but not all of it. We ought not to forget the bigger picture: it is an access to justice issue. Closed doors on legal aid firms mean that it is all the more difficult for the public — our constituents — to access justice. Remember that our constituents are the people who avail themselves of those services, and those who are in receipt of legal aid are entitled to it. Every facet of their lives is inspected before approval is granted because it is means-tested, and even those thresholds have not kept pace with wages, thus excluding many who work but are still on the breadline. Considerable resources are brought to bear to secure prosecutions, but the fundamental tenet of justice is that everybody is entitled to legal representation and a defence where applicable. We are sleepwalking our way into a position where people will no longer be able to access help by way of legal representation.

Delayed payments are not the totality of the problem for the legal profession, but they certainly have serious outcomes and can make a bad situation infinitely worse. The issue for the House is that it is not just about the odd legal firm disappearing. From the Department's perspective, the delays are used as a management tool to assist with budgeting, but the result is jeopardy for others. Twelve weeks is inordinate, and, given the delays in the system, the payment is often for work that was undertaken up to a year previous. In no other sector would that be acceptable, but then lawyers are just above politicians on the popularity scale.

The consequences are not just for lawyers, they are for our justice system in Northern Ireland and the fundamental principles of access to justice and the right to legal representation. The sector will, doubtless, appreciate the motion, but in the grand scheme, so should we all.

Minister, I call on you to respond. You have 15 minutes.

Go raibh maith agat, a Leas-Cheann Comhairle.

[Translation: Thank you, Mr Deputy Speaker.]

I welcome the opportunity to speak to the motion as it shines a light on an incredibly important matter. Small and microbusinesses, as many Members have reflected, are the heart of our local economy. It is, therefore, incumbent on all of us to do what we can to support those businesses. I also fully recognise the difficulties that are caused by delays in promptly paying suppliers, particularly for small businesses and microbusinesses that play an important part in supporting the local economy. Many small businesses, as has been reflected, have a limited cash flow, and undue delays in paying invoices can have a devastating impact on the survival of those businesses and their employees. I am pleased to confirm that the current public contract regulations, which apply to all public bodies here, including councils, already require that payments to contractors be made no later than 30 days from receipt of a valid undisputed invoice. Those regulations also require contractors to pay their subcontractors within 30 days and that those requirements be in all further subcontracts in the supply chain. The new procurement regulations, which are due to come into force shortly, also incorporate those requirements.

The Executive have a prompt payment target whereby Departments aim to pay valid and undisputed invoices within 10 days of receipt and no later than 30 days. I encourage all Ministers to require their non-departmental public bodies to implement that policy. I add that, while the Executive have no authority over councils, I encourage the Minister for Communities to work with council networks to improve the payment practices in that area, given the number of microbusinesses that provide goods and services to councils.

Where my Department's responsibilities are concerned, the Finance Shared Services provide transactional processing and reporting, including making payments to suppliers on behalf of central government. In the previous financial year, the Finance Shared Services processed over 807,000 payments totalling approximately £4 billion. During that year, 91% of valid invoices were paid within 10 days of receipt and 97% of valid invoices were paid within 30 days. That strong record of prompt payment has been maintained throughout this year, and I am committed to ensuring that central government leads by example and continues to drive up performance.

Unfortunately, the level of performance across the public sector varies greatly, with a number of areas requiring immediate attention to improve their performance. I strongly urge all public- and private-sector organisations to adhere to that best practice and, where their performance falls short, to take immediate action to make the necessary improvements.

I am meeting the local government partnership panel next week and have already requested that prompt payment performance be a key matter for discussion. In addition, my officials have been engaging with the Federation of Small Businesses to share learning and discuss prompt payment performance and reporting. I will meet the federation tomorrow, as Mr Honeyford mentioned, to discuss how best we drive up performance and improve reporting across the public sector.

It is important that there is transparency around prompt payment performance and reporting on the reasons for delay. The motion references:

"56% of small business owners and the self-employed ... had experienced late payment in the past three months".

The data supporting that does not relate exclusively to the public sector, and I urge all private-sector businesses to also promptly pay their suppliers, particularly those that are in their supply chains. I suggest that resources be concentrated on improving the current 10-day target, with the aim of moving to a five-day target when that has been achieved, depending on transaction and resource implications.

I also call on all sectors, public and private, to recognise the challenges that businesses face and the importance of cash flow to them and their employees and to immediately address any shortfall in the prompt payment to their suppliers. I strongly believe that payment performance in the public sector will improve only if we strengthen the monitoring of prompt payment targets. I plan to bring a refreshed public procurement policy statement to the Executive that will include a requirement for public bodies to report on their prompt payment performance. That additional transparency will improve accountability and maintain the appropriate level of scrutiny and focus on this important matter.

In my role as Finance Minister, I will continue to advocate for the prompt payment of our small and medium-sized enterprises for the goods and services that they provide and for central government to lead by example.

Thank you very much indeed, Minister. I call now on Kate Nicholl. You have five minutes.

Thank you, Mr Deputy Speaker. I start by congratulating the new Member for North Antrim for an excellent maiden speech. I look forward to further contributions.

My job is to make a winding-up speech for the Alliance amendment to the motion on late payments in the public sector. We know that cash flow is crucial for the survival of small and medium-sized businesses, but it is also really important for growth, allowing businesses to reinvest into their businesses and make an even bigger contribution to the economy as a whole.

In March 2023, 89% of businesses in Northern Ireland were microbusinesses with fewer than 10 employees, and just over 2% of businesses had 50 or more employees, and four in 10 businesses had a turnover of less than £100,000 while just over one in 10 had a turnover in excess of £1 million. Given that micro and small businesses are the backbone of our economy, as Deirdre said, they also hold the key to growing our economy — something that we need in order to deliver greater prosperity for all our people.

We know that public-sector bodies procure only when the funding is in place, so it is fair to assume that the issue with late payments is largely administrative. FSB research found that, in 2021-22, more than 234,000 invoices were not paid within the public-sector legal requirement of 30 calendar days. That is particularly frustrating for businesses that will tell you of the impact that late payments have on their ability to trade and their confidence in engaging in public procurement and, in more extreme cases, of how it can lead to insolvency and impact on their mental health. All will say that it results in wasted time and constrained growth. Therefore, given the importance of business to our economy, and given the impact that prompt payment can have in supporting local businesses and their ability to grow, it is regrettable that more focus has not been put on the issue. That is why my colleague David Honeyford has private Member's legislation in development on this. Money owed by public bodies to businesses within our economy should be going back into the economy as quickly as possible, not resting in government accounts.

There is also an issue around the inconsistency of payment data in the public sector. Sometimes it is unavailable, despite requirements to publish and explain performance. David mentioned that as well. Without data, we cannot understand more about why and how late payments from the public sector are occurring. That data could also tell us more about payment practices through the supply chain, which is, as he highlighted, also an issue.

We all agree that the current statistics are unsustainable. We agree that more needs to be done. The Alliance amendment intends to strengthen and widen the motion to include other Departments, arm's-length bodies and agencies. It provides a target:

"for payment of at least 90% of invoices within five days for work completed", and calls on Ministers to work together:

"to agree fresh measures to ensure that 100% of valid invoices are paid within the 30 calendar day statutory limit, with the same prompt payment requirements for subcontractors and suppliers enshrined in the terms of all public-sector procurement."

I welcome the Minister's comments and the fact that her Department is taking this so seriously.

Running a business is stressful at the best of times. I loved David's analogy on growth and creating the conditions. That was very powerful. Government and other public bodies should be supporting businesses to ease those stresses, not exacerbating them with late payments. I hope that Members will support our amendment and support the motion.

I call Diana Armstrong.

[Laughter.]

Sorry, I call Diane Forsythe. Diane, you have 10 minutes.

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.

Thank you, Diane. I apologise for getting your name wrong: it is not like me.

Question, That the amendment be made, put and agreed to.

Main Question, as amended, put and agreed to. Resolved:

That this Assembly believes that businesses and traders who supply goods and services to the public sector should be paid on time and in full; recognises that late payments can negatively impact on cash flow and cause undue stress for business owners and their employees; notes with concern the findings of research published by the Federation of Small Businesses (FSB) in 2023, which found that 56% of small business owners and the self-employed in Northern Ireland had experienced late payment in the past three months; further notes that Northern Ireland was jointly the worst affected region; is concerned that the reasons for late public-sector payments generally remain unreported; highlights the need for enhanced reporting by all public bodies in order to improve accountability in this area; calls on the Minister of Finance to introduce a new Executive target, covering Departments, their agencies and arm’s-length bodies, and local government, for payment of at least 90% of invoices within five days for work completed; and further calls on the Minister to work with Executive colleagues to agree fresh measures to ensure that 100% of valid invoices are paid within the 30 calendar day statutory limit, with the same prompt payment requirements for subcontractors and suppliers enshrined in the terms of all public-sector procurement.

Motion made: That the Assembly do now adjourn. — [Mr Deputy Speaker (Dr Aiken).]