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Charities: Finance

Volume 464: debated on Monday 8 October 2007

To ask the Chancellor of the Duchy of Lancaster what the Government’s policy is on paying foregone interest when money owed or promised to charities is delayed. (154537)

Public sector organisations should: use good commercial practice in managing the flows of expenditure and commitments they deal with; settle their bills on time within contractual terms in line with The Better Payments Practice Code; and be bound by The Late Payment of Commercial Debts (Interest) Act 1988. In relation to grants, once an agreement has been made and payment schedules agreed to, public sector organisations should honour these in the same way as they would any commercial or contractual arrangements. Government departments are required to note as exceptional any interest payments in relation to late payments in their resource accounts. This is set out in the “Managing Public Money” guidance issued by HM Treasury on sound financial management of public funds.