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Vodafone and Rolls Royce among large firms suspended from Prompt Payment Code for not paying suppliers on time

Vodafone and Rolls Royce among large firms suspended from Prompt Payment Code for not paying suppliers on time
Dan Martin
Dan MartinDan Martin Content & Events

Posted: Sat 27th Apr 2019

A total of 17 big businesses have been either removed or suspended from a code through which the signatories commit to good payment practices to suppliers and paying 95% of invoices within 60 days.

The figures for the last quarter have been released today by the Chartered Institute of Credit Management (CICM), which administers the Prompt Payment Code (PPC).

Under new government rules, big companies are obliged to publicly report payment data and a result, CICM is reviewing whether businesses are meeting the standards of the code and paying suppliers promptly.

It said 17 companies have been removed or suspended and several household names are on the list.

These companies have been removed from the code for non-compliance and not providing a plan for improvement:

  • BHP Billiton: Global resources business

  • DHL: Global logistics business

  • GKN: Multinational aerospace and automotive components business

  • John Sisk & Son: International construction company

  • R. Twining and Company: Purchaser and seller of tea, coffee and other beverages

These businesses have been suspended for not paying suppliers on time, but have committed to make changes and pay suppliers promptly:

  • Atos IT Services UK&I: IT services business

  • Balfour Beatty: International infrastructure group

  • British Sugar UK: Producer of sugar

  • Costain: Construction and engineering company

  • Engie Services: Facilities management services company

  • Interserve Construction: Construction company

  • Kellogg Brown & Root: Facilities management and construction engineering company

  • Laing O'Rourke: International engineering business

  • Persimmon Homes: UK house building company

  • Rolls-Royce: Engineering business focused on power and propulsion systems

  • SSE: Electrical and telecoms provider

  • Vodafone: Telecoms company

Philip King, CICM chief executive, said the PPC Board was "disappointed with the actions of a minority who continue to treat their suppliers unfairly, and has no satisfaction in having to name them publicly".

He added: "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."

Late payment by large businesses a big problem

Today's news is the latest to reveal poor payment practices by large businesses towards their small business suppliers.

Earlier this month, Paul Uppal, the Small Business Commissioner appointed by the government to help small firms deal with late payment, publicly criticised health retailer Holland & Barrett and claimed it "doesn't care about its suppliers or take prompt payment seriously".

Commenting on the PPC report, Uppal said: "As a Prompt Payment Code Compliance Board member, I will continue to support Philip King and the board in removing or suspending noncompliant 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."

The government has announced measures aimed at tackling the problem of poor payment practices including threatening to prevent companies from winning public sector contracts if they don't pay suppliers within 60 days. Those rules come into force on 1 September.

But there have been calls for more to be done including allowing the Small Business Commissioner to fine persistent late payers.

Figures indicate that that up to a trillion pounds a year is tied up in unpaid bills and analysis of two million invoices by Xero showed that the average British small business is owed £24,841 in late payments on any given day.

Related advice:
How to maximise your company's cashflow and save money
How to chase your business' debts and get the cash in

Dan Martin
Dan MartinDan Martin Content & Events
I'm a freelance content creator and event host who helps small businesses and the organisations that support them. I have 18 years of experience as a small business journalist having interviewed hundreds of entrepreneurs from billionaires like Sir Richard Branson to the founders behind brand new start-ups. I've worked for a range of leading small business publications and support groups, most recently as head of content at Enterprise Nation where I was responsible for the prolific output of content on the company's blog and social media. I'm based in Bristol where I run and host regular events with the local small business community and have strong connections to major business organisations in the south west region. In total, I've hosted over 50 events; from intimate meet-ups to conferences with an audience of hundreds including events for international brands like Facebook and Xero. I'm also a big fan of podcasts having hosted Enterprise Nation's Small Business Sessions as well as lots of online events including Facebook Live interviews, webinars and three live web chats from inside 10 Downing Street. With my partner, I co-run Lifestyle District, a lifestyle blog focused on culture, art, theatre and photography. I'm here to help. I'm volunteering free advice calls of up to an hour as part of the Recovery Advice for Business scheme, over the next 6 months. Please get in touch to see how I can help your business. 

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