Construction companies suspended from Prompt Payment Code

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Construction companies including Balfour Beatty, Costain, Laing O’Rourke and Persimmon have been removed from the Prompt Payment Code for failing to pay suppliers on time

Action on companies who fail to meet the standard of the Prompt Payment Code (PPC) has seen 17 companies removed or suspended from the code during the past quarter, the Chartered Institute of Credit Management (CICM) has revealed.

Thousands of companies who sign up to the code, administered by CICM on behalf of the Government, pledge to uphold its best practice for payment standards in order to help end the culture of late payment, particularly for small businesses. This includes a commitment to pay 95% of all supplier invoices within 60 days.

Based on the new Payment Practices Reporting data that large businesses must publicly report, CICM is reviewing whether companies are meeting the standards of the code and paying their suppliers promptly.

The first phase of these reviews has identified 17 businesses to be removed or suspended, with more removals and suspensions expected in the second phase of review currently underway.

Five companies have been removed from the code for non-compliance and not providing a plan for how they will meet the terms of the code. They are:

  • BHP Billiton
  • DHL
  • GKN Plc
  • John Sisk & Son Limited
  • Twining and Company Limited.

12 businesses have been suspended from the PPC, for not paying their suppliers in line with the code, but they have committed to making changes to meet the standards of the code and pay suppliers promptly. They are:

  • Atos IT Services UK&I
  • Balfour Beatty Plc
  • British Sugar UK
  • Costain Limited
  • Engie Services Limited
  • Interserve Construction
  • Kellogg Brown & Root Limited
  • Laing O’Rourke
  • Persimmon Homes Limited
  • Rolls-Royce Plc
  • SSE
  • Vodafone Limited.

Companies are already taking action to improve, which is welcomed and supported by CICM. Interserve Construction, for example, has improved its performance based on an action plan agreed with the CICM, which has seen the business reduce the number of payments over 60 days by 10% over the second half of last year; the company is continuing to improve towards compliance over the next six months.

CICM’s chief executive Philip King said: “The Board is disappointed with the actions of a minority who continue to treat their suppliers unfairly, and has no satisfaction in having to name them publicly.

“As part of our work driving culture change to end late payments, we will continue to challenge signatories to the Code if the obligatory Payment Practice Reporting data suggests that their practices are not compliant with the code.”

Small business commissioner Paul Uppal added: “As a Prompt Payment Code Compliance Board member, I will continue to support Philip King and the board in removing or suspending non-compliant signatories from the code. It is essential the code has credibility and demonstrates a commitment to ensure small businesses are treated fairly.

“My team has already recovered more than £3.5m in late payments and is ready and available to support small businesses experiencing poor payment practices.”

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