EU Public Sector Pays Too Slowly

It's SME Week in the EU, and finance is very much on the agenda, with all sorts of chat about micro-finance and other funding.

But the fundamental problem is that SMEs don't get paid on time.

In fact, given their limited cashflow, even early payment of invoices is actually highly beneficial.

And while we've had plenty of legislation on the subject, and governments have bailed-out the banks, still the European Payment Index survey of over 5,000 European businesses reveals that the public sector takes an average of 37 days longer than the private sector to pay business invoices. So it's high time the Accounts Payable staff in public sector bodies got their act together.

Imagine! A lean public sector that pays on time!

Other, general, findings in the Intrum Justitia report include:

• only 50% of all invoices are paid within 30 days, down from 53% last year, with 70% of respondents expecting that number to decline in the coming year.
  


• 2.4% of all invoices have to be written off as bad debt, an increase of 0.4% or €20 billion on last year.
  


• If all invoices were paid on time and in full, the money saved would equate to a liquidity injection of €270 billion into the European economy.

PS: The Irish government has changed its terms to pay on 15 rather than 30 days, though there is some doubt as to whether this will sound in practice.

Swinegate's Feeble Whistleblower?

For every scandal there seems to be an heroic whistleblower working tirelessly to expose the thing, ignored by all in authority. For the MPs' expenses saga - "Swinegate" seems apt - we can only look to Andrew Walker, who is said to have signed off MP's expense claims in his role at the Commons Fees Office. Apparently, he "told Speaker Michael Martin more than five years ago that he must act to curb excessive claims. But Westminster sources say the Speaker told him not to meddle, and 'punished' him by refusing to speak to him for weeks at a time." Ah, the poor, poor man.

Just as the revelation of Paul Moore's unheeded warnings to the HBOS board were enough to hole Sir James Crosby's career at the FSA below the waterline, so should Andrew Walker's warnings do for the Speaker - not to mention all the little piggies to the left and right who had their snouts in the trough.

But hang on. Five years ago?! You mean Mr Walker has spent 5 more years signing off the sort of expense claims that he once found unacceptable. You mean that, unlike Mr Moore, he did not continue to make himself a thorn in the side of those he was supposed to be reining in? If that's true, then sorry, Mr Walker, you too have to hit the road. No pay-off. No pension.

"Another soure" is quoted as saying:

"A while back it looked as if Andrew might lose his job and you can't blame him for thinking that he might as well keep his head down. Why should he sacrifice his career for the sake of others?"

This feeble rhetorical question sums up what Westminster is all about. To change that, we need an answer, and it has to be: if you stop doing your job properly, you are sacrificing your career.

You're On Your Own: Pay Less, Diversify More, Be Contrarian

Heeding John Kay's timely warning, I've been paying a lot more attention to what's happening to my meager store of pension and ISA money and how much is being left in the hands of so-called "managers" who merely track an Index and their peers.

News on that front is getting worse. According to the FT, fund managers are finding it tougher to gain distribution through European retail banks, who are the dominant sales channel in continental Europe. The banks are cutting the number of fund managers whose products they distribute, and the fund managers are "scrambling" to be included. "Some fund managers are likely to have to pay higher charges to distributors...," the head of UK sales at JPMorgan Asset Management is quoted as saying. And the head of international retail business at BlackRock says, "Investors feel let down by what has happened in the financial sector as the industry has been focusing more on its own needs than those of clients."

In the same article, Lipper estimates that UK retail banks only distribute about 4% of investment products sold in the UK, and IFA-advised sales remain dominant at about 53%. But we all know that IFAs get a decent whack for the service they provide, so we're probably only seeing European banks playing catch up.

This news again signals the need to get more active, and use discount and execution-only providers to invest in cheaper products like Exchange Traded Funds. Doing the opposite of what the mainstream investment advertising suggests is also worth a shot, according to Mr Kay. This is not easy in the context of a full-time job and family commitments. While I've previously used a discount investment broker and began a stakeholder-friendly pension, only recently have I woken up to the "DIY ISA" and a low cost Self-invested personal pension (SIPP) that allows me to get off piste. But that's where I need to go. Next stop: ETF's in out-of-favour, non-correlated sectors.

I feel like this guy:

Phoul-Mouthing the Phoul-Mouthers Who Phoul-Mouth Etc

I'm very much looking forward to a balanced, impartial, rational presentation of my balanced, impartial and rational - and very much personal - views on behavioural targeting or interest-based advertising at the SCL Information Governance Conference on 12 May.

In the meantime, I would only observe that this site is a nice illustration of the implications I discussed a few months back, of trying to build a brand that is perceived as an institution, rather than trying to build one that is perceived as a facilitator.

Pragmatism Meets Oikonomics

One way to put theories to the test is simply to race them. Literally. On a race track. Let 'em fight it out, see which one wins.

So it was decided after only a small quantity of wine that Will and the folks at DB Max should be asked to make some room for Pragmatist and Oikonomics in the DB Max rowing triathlon on May 4 at Mallory Park.

Thus, by lunchtime Monday you should know whether it is better to base your personal theories about Life on trial, error and bitter experience or by extrapolating from careful, patient, highly-trained observation (trade: "deep hanging out").

Right. I'm off to the gym. But will leave you with Gus Mckechnie's extraordinary contribution to the world of sporting endeavour.