Property Services Agency (Hansard, 16 February 1993)

§ Mr. Steen
To ask the Secretary of State for the Environment what type of computing system is used by the Property Services Agency accounts department; when it was installed; at what cost; and how has it affected the time taken to deal with accounts.

§ Mr. Redwood
The PSA services runs the Ross systems integrated accounting package on a developed DEC VAX 195W hardware platform. The new systems, providing fully auditable commercial and vote accounting, went live on a phased basis for resource accounting between January and April 1991. Works bill payment and recovery was also transferred onto the Ross systems from the agency's centralised accounts division on a phased programme, which was completed in February 1992. The full strategic accounting system project cost £10.3 million; the later works bill payment project cost £1.5 million.
The new systems enable the PSA businesses to operate on an autonomous basis and improve financial discipline in PSA. The advantages of the new devolved accounting systems include the improved quality of local invoicing and the elimination of any delay in moving paperwork to a central location. Improvements in the payment cycle rely as much on the certification procedures and handling processes involved as on the systems themselves. The businesses are working to ensure that subcontractors are paid within 30 days of validation.

§ Mr. Steen
To ask the Secretary of State for the Environment how much the Property Services Agency owes Landscaping and Grounds Maintenance Ltd., of Trescan, Wembury Road, Wembury, Plymouth; if he will instruct the Property Services Agency to pay its outstanding debt; what is his policy on late payment of debts by the Property Services Agency; when the Property Services Agency last paid the company; and for what period of work.

§ Mr. Redwood
Landscaping and Grounds Maintenance Ltd. will be paid £30,590 later this week in respect of work let under a measured term contract. The company was last paid on 4 February 1993 for work done up to the end of November 1993. New payment arrangements are being implemented by the PSA building management businesses, where it is acting as agents for the Ministry of Defence for payment purposes under MOD property management contracts, such that subcontractors are paid no later than seven days following receipt of payment from the client, MOD. There is an existing obligation on the MOD to pay promptly and this together with the new payment arrangements being adopted by the PSAS will ensure that subcontractors should be paid within 30 days from validation.
The development of appropriate systems and procedural changes is underway so that by 1 April 1993 the five BM businesses are operating on this new basis. As these arrangements are introduced, I am demanding better performance from PSA in reducing delays in payments to contractors by getting invoices to MOD more promptly.
These arrangements create a contractual commitment on the managing contractor to make payment to subcontractors whose invoices have been accepted for 196W payment by MOD and should be distinguished from other forms of "pay when paid" for capital works contracts whereby main contractors may withhold payments to subcontractors. This latter practice is inconsistent with the Government's prompt payment policy.
While the building management businesses are still in Government ownership, and they retain the obligations of the Government's prompt payment policy in their own right, a safety net will be in place so that PSA can ensure prompt payment to its contractors even where MOD had not paid PSA.

§ Mr. Ancram
To ask the Secretary of State for the Environment, if he will provide details of the pay when paid policy of the Property Services Agency and of its purpose and origins; and if he will make a statement on the application to this policy of the Government's requiring Departments to pay their private contractors as quickly as possible.

§ Mr. Redwood
New payment arrangements are being implemented by the PSA building management businesses, where they are acting as agents for the Ministry of Defence for payment purposes under MOD property management contracts, such that subcontractors are paid no later than seven days following receipt of payment from the client, MOD. There is an existing obligation on the MOD to pay promptly and this together with the new payment arrangements being adopted by the PSA will ensure that subcontractors should be paid within 30 days from validation.
The development of appropriate systems and procedural changes is under way so that by 1 April 1993 the five BM businesses are operating on this new basis. As these arrangements are introduced, I am demanding better performance from PSA in reducing delays in payments to contractors by getting invoices to MOD more promptly.
These arrangements create a contractual commitment on the managing contractor to make payment to subcontractors whose invoices have been accepted for payment by MOD and should be distinguished from other forms of "pay when paid" for capital works contracts whereby main contractors may withhold payments to subcontractors. This latter practice is inconsistent with the Government's prompt payment policy.
While the building management businesses are still in Government ownership, and they retain the obligations of the Government's prompt payment policy in their own right, a safety net will be in place so that PSA can ensure prompt payment to its contractors even where MOD had not paid PSA.