Government crackdown

More big UK firms named and shamed for late payments


BT is among the firms suspended (pic: Terry Murden)

A further 18 big businesses have been named and shamed in a move by the UK Government to show it is serious about tackling the scourge of late payments.

The firms, which include BT, Prudential and Scottish Gas owner Centrica, have been suspended from the Government’s Prompt Payment Code for failing to pay suppliers on time.

They were found to be taking longer than 60 days to make payments, according to the Chartered Institute of Credit Management (CICM).

Those companies can no longer use Government branding or say they are signatories of the code and must now work with the CICM to get reinstated. The suspensions come after 17 businesses, including Vodafone and engine maker Rolls-Royce, were removed or suspended in April.

The Government has vowed to crack down on late payments, although critics have said ministers have not done enough to properly fund the scheme or put in place strict enough deterrents.

One new rule due to start in September means any supplier which bids for a Government contract above £5 million a year will be expected to answer questions about its payment practices and performance.

Action plans

If it is unable to demonstrate that it is paying 95% of invoices within 60 days, it may be excluded from the process.

CICM chief executive Philip King, who administers the code on behalf of the Government’s Business, Energy and Industrial Strategy department, 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.”

The one company which has not submitted a plan is AB World Foods, which is owned by Primark’s parent company, Associated British Foods.

Small Business Minister Kelly Tolhurst added: “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.”

Unethical practices

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.”

Separately, Atos IT Services, which was removed from the code earlier this year, has been reinstated after administrators for the scheme were happy with changes the company made to its payments.

Mike Cherry

Mike Cherry: positive steps

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.” 

Stuart Mackinnon, FSB’s external affairs manager for Scotland, said:  “Thousands of Scottish businesses close their doors every year due to late payments. We need to get tough with those big businesses that abuse their suppliers and use them as cheap credit.

“Today’s suspensions hopefully demonstrate a change of attitude at the top toward late paying big businesses. North of the border, 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.”

The latest list

  • Severfield (Design & Build) Ltd
  • Stantec UK Limited
  • Screwfix
  • Prudential
  • 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
  • Centrica
  • Maintenance Management Limited
  • Fujitsu Services Limited
  • De La Rue Holdings plc
  • Domino UK Ltd
  • BT plc
  • AB World Foods

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