EDITORIAL — Public administration and the terms of payment. Between light and shadow

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Marzio Nava – Editor in Chief

Many textile care companies, especially those working with public health care sector, are dealing with the issues of having to regularly face the exhausting, long and challenging payment terms when working with public administration.

However, there might be a light in the tunnel. On 10 November 2019, the Minister for Economic Affairs published information relative to the terms of payment. The numbers published online speak for themselves.

The payments by the Pa are to become more frequent and will supposedly regard high amounts. According to the data by Finance Department, the average payment time moved from 71 days in 2015 to 54 days for invoices issued in 2018. Four days less if compared to the previous year but still 24 days more than what stated by the regulation (30 days; 60 for the National Health Service). The reduction is more consistent for the National Health Service “companies” (from 22 days in 2015 to three in 2018) while it is below the national average for administrative centers and local institutions. As far as the public administration goes, in 2018, 80% of the invoiced amounts has been regularly paid, with better timing of compared to the past.

Looking at the situation from the geography point of view, the most “punctual” regions are Tuscany, Lombardy and Friuli-Venezia Giulia, that paid the invoices, on average, within 20 day after the issuing date. Basilicata turned out to be the black sheep of the situation with its 3-month payment time that would reach 73 days of a delay. This shows a huge gap between Italian regions.

All the public administrations are obliged to pay the invoice within 30 days from the receiving date, with the exception of the National Health Service that follows a sixty-day payment term. What is to be remembered here, is that the regulation has been in force since 26 May 2019 (European Law 2018) as a tentative solution to a series of procedures by Brussels against Italy as a result of a missing or non-complete compliance with EU regulations on terms of payment and contracts.

Moreover, in case of a delay of a contractor in the execution of the contract, symmetrically, penalties shall be applied. They will  amount up to 10% of the total net value of the contract. This practical possibility in the procedure turns out to be rather difficult to apply given the negotiation asymmetry between the Pa and businesses. Is it possible to activate a violation procedure by a private business, because of the missing payment, against public institutions or the State?

Leaving the rhetoric question behind, instead of Christmas delicacies, I have chosen to enrich this end-of-the-year editorial with figures, percentage data and forecast. With the best Christmas wishes, let the sector operators, who are used to working with the Pa and dealing with the terms of payments, evaluate the provided data on the basis of their direct experience which is what matters the most in the end.

Detergo Magazine Dicembre 2019