Balfour, Vodafone and Others Suspended from Prompt Payment Code
An organisation acting on behalf of the government has cracked down on late paying large businesses this week, suspending 12 firms from a voluntary punctual payment code.
The list of firms includes several construction giants Balfour Beatty, Laing O’Rourke, Interserve, Costain and Persimmon.
It also includes telecoms company Vodafone and technology services provider Atos IT Services.
These firms were among more than 2,500 companies that have signed up to the Prompt Payment Code, which is administered by the Chartered Institute of Credit Management (CICM), on behalf of the government.
To adhere to the code, firms need to pay 95% of supplier invoices within 60 days or risk suspension or removal from the voluntary scheme.
The suspensions come after the government announced that it would stop late-paying firms from bidding on government contracts from this September.
The 12 suspended businesses will now need to work with the CICM and agree a plan of action to address their payment practices.
Five more companies - John Sisk & Son, BHP Billiton, DHL, GKN Plc and Twining - have been removed from the code for continued non-compliance.
This is the first time that CICM has named and shamed any businesses suspended or expelled from the scheme.
From 1 September 2019, any supplier bidding for a government contract over £5m per year will have to answer questions about their payment performance.
Large firms that don’t meet fair payment guidelines could be excluded from bidding.
Limited company contractors that are treated unfairly by organisations that have signed up to the Prompt Payment Code can make a complaint to the CICM so that they can investigate.
Miles Grady, Director of Umbrella.co.uk, said: “These suspensions are welcome news for small businesses. We have called for tougher action on late payers for a long time, but we will have to wait and see if this voluntary code makes any concrete difference for the average limited company contractor.”