Credit, Collections & Insolvency News
Eighteen companies including BT, British American Tobacco, and Centrica – have been suspended from the Prompt Payment Code for failing to pay suppliers on time, the Chartered Institute of Credit Management (CICM) has announced.
Screwfix, Prudential, and various businesses of BAE Systems are also among those that have failed to honour their Code commitment to pay 95% of all supplier invoices within 60 days. The Code is administered by the CICM on behalf of the Department for Business, Energy and Industrial Strategy (BEIS). Signatories pledge to uphold its best practice for payment standards to end the culture of late payment.
The full list of companies suspended or removed from the Code include17 suspended with action plan received (or committed):
One suspended with no action plan yet received:
The Prompt Payment Code’s Compliance Board, chaired by CICM’s Chief Executive Philip King, includes the Small Business Commissioner Paul Uppal, and regularly reviews the status of organisations to ensure they are upholding their commitments. Businesses suspended from the Code are invited to produce an action plan that leads to a substantial improvement in payment performance and are reinstated to the Code as soon as they demonstrate compliance.
Phillip King said “We will continue to challenge signatories to the Code if the obligatory Payment Practice Reporting data suggests that their practices are not compliant. We are encouraged that of the 18 who have been suspended or removed today, all but one has already submitted action plans to achieve future compliance, and we are working closely with those businesses to support a better payment culture.”
Small Business Commissioner Paul Uppal said “Large companies who are not currently meeting the Code Standards need to note their unethical payment practices will not be tolerated. The suspension of those who are failing to meet their obligations demonstrates Government is committed to ensure small businesses are treated fairly.”
Small Business Minister Kelly Tolhurst said: “As a former small business owner I know how damaging late payments can be. Although the vast majority of businesses pay their bills on time, we recently announced ambitious new measures to level the playing field for small businesses as part of our modern Industrial Strategy. These include plans to hold company boards accountable for payment practices and proposed new powers for the Small Business Commissioner to tackle late payments through fines and binding payment plans.”
The Cabinet Office Minister for Implementation, Oliver Dowden said “Paying invoices promptly is vital, particular for smaller businesses, who are the backbone of the UK economy. So I hope that the companies who have been suspended from the code will now get their act together and work hard to improve their performance.”
“From September 1st, 2019, any supplier who bids for a government contract above £5m per annum will be expected to answer questions about their payment practices and performance. If they are unable to demonstrate that they are paying 95% of invoices within 60 days, they may be excluded from the process.”
Atos IT Services UK Limited, which was included in a list of businesses removed from the Code earlier this year, has since been re-instated having satisfied the PPC Compliance Board that it is now meeting the standards and commitments of the Code.
Responding to the suspension of 18 companies from the Prompt Payment Code, Federation of Small Businesses National Chairman, Mike Cherry, said “It is right and proper to suspend big businesses for poor payment practices. This second wave of suspensions indicates that the Government is getting serious about tackling the late payments crisis in the UK and that this sort of behaviour will no longer be tolerated. Positive steps like this and the package of measures announced last month by the Government, are vital in shifting the balance of power away from big business that for too long have got away with mistreating small suppliers.
“Historically the code was a good idea, however in practice it has been used by companies like Carillion to claim to be prompt payers. We still need to see wholesale reform of the Code when it moves officially under the Commissioner later this year. Late payers have no place in Government supply chains. Late payment is bad for small businesses, bad for public services and bad for the taxpayer.”