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Wednesday 24 September 2014

Scrooge universities refuse to pay small firms on time

Published 17/08/2014 | 00:00

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Close-up of couple doing finances at homeLobby groups for the country's small firms say the delays in payment of millions of euro is piling huge pressure on struggling small businesses which supply these institutions.
Lobby groups for the country's small firms say the delays in payment of millions of euro is piling huge pressure on struggling small businesses which supply these institutions.

Thousands of small businesses are being "cruelly squeezed" by the country's top universities and colleges who are failing to pay them on time, in breach of their own rules, the Sunday Independent has learned.

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Lobby groups for the country's small firms say the delays in payment of millions of euro is piling huge pressure on struggling small businesses which supply these institutions.

Figures released by the Department of Education reveal the poor levels of adherence to the Government's own stated policy of paying suppliers within 15 days.

Combined with a failure of State-owned banks to provide adequate credit, these significant delays have contributed to many going out of business since the onset of the crash, and is preventing many others from expanding.

According to the latest figures, which covered the period from April to June, not one of Ireland's seven universities made more than 65pc of their payments within the 15-day period.

NUI Maynooth was the worst performer in terms of meeting the 15-day payment deadline, with just 33pc of payments made within the period.

Out of 6,294 payments totalling €13.4m, just 2,098 were made on time. It performed just as poorly in the first three months of the year, with just 33pc of payments totalling €12.3m being paid on schedule.

For the first six months, just €298,658 of the €25.7m in total paid out by NUI Maynooth related to disputed invoices, meaning the vast majority of payments were delayed through system inefficiencies and red tape.

Dublin City University (DCU) was the next worst with just 37pc of its payments being paid on time between April and June.

Out of a total of 9,752 payments amounting to €26m in the three-month period, just 3,617 were paid on time. Of that €26m, just €446,396 amounted to disputed
invoices.

The country's largest college, University College Dublin (UCD) paid 42pc of its invoices within the 15- day period, meaning, out of a spend of €38.5m, it failed to pay €13m of it within the 15 days.

Trinity College Dublin (TCD) paid just 48pc of its invoices totalling €27.8m within the 15 days. The three most prompt payers were University College Cork (UCC) which paid 54pc of invoices totalling €16.8m on time, and NUI Galway and the University of Limerick (UL) which both paid 65pc on time.

The prompt payment rule was introduced in 2009 for all Government departments, and extended to State agencies in 2011.

Under law, creditors are entitled to interest for late payment after 30 days after delivering the goods or receipt of an invoice.

A spokesman for Education Minister Jan O'Sullivan said she will further engage with agencies and bodies to address issues of "very low compliance" or an ongoing significant drop in their 
compliance rate. The spokesman added the Department's own experience in achieving 96pc compliance has created a wealth of experience that can be used to assist agencies and bodies to ensure compliance.

Commenting on the figures, Fianna Fail's jobs spokesman Dara Calleary accused the Government of punishing small businesses.

He told the Sunday Independent: "They certainly have talked a good game, but the figures show across the board, small firms are being hit hard, by the Government's failure to act."

ISME, the lobby group for small and medium businesses, said that delays in payments to their members actually increased from 60 days on average, to 63 in the three months.

It has called on the Government to stop "thumbing its nose" at small businesses which are being held back from expanding because of the payment delays.

ISME Chief Executive Mark Fielding said the 15-day deadline is, in many cases, a fantasy.

"Some central departments have gotten much better in paying on time, but when you go into their satellite agencies, our members are waiting 50 days, 60 days, and in some cases, up to 120 days to be paid. These agencies are being allowed thumb their noses at the small businesses who they deal with," he said.

Sunday Independent

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