Big names including BT Plc, British American Tobacco, and Centrica are among 18 companies to be suspended from the UK’s Prompt Payment Code for failing to pay suppliers on time, according to the Chartered Institute of Credit Management (CICM).
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 includes:
17 suspended with action plan received (or committed):
- Severfield (Design & Build) Ltd
- Stantec UK Limited
- British American Tobacco (Holdings) Limited
- Galliford Try PLC
- Alun Griffiths
- Ferrovial Agroman (UK) Limited
- BAE Systems Global Combat Systems Limited
- BAE Systems Applied Intelligence Limited
- BAE Systems (Oman) Limited
- Maintenance Management Limited
- Fujitsu Services Limited
- De La Rue Holdings plc
- Domino UK Ltd
- BT plc
One suspended with no action plan yet received:
- AB World Foods
The Prompt Payment Code’s Compliance Board, chaired by CICM Chief Executive Philip King, includes the Small Business Commissioner Paul Uppal, and regularly reviews the status of organizations 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.
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 added: "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 added: "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.
The Federation of Small Businesses external affairs manager for Scotland Stuart Mackinnon said: “We need to get tough with those big businesses that abuse their suppliers and use them as cheap credit…we’ve argued for some time that persistent late payers can’t be awarded public contracts. Across the UK, we need to see the next Prime Minister force the biggest businesses to behave responsibly toward their supply chains.”
In fact, from 1 September 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.
The CICM also reported that Atos IT Services UK Limited, which was included in a list of businesses suspended 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.