More than a dozen big name businesses have been suspended from the Government’s Prompt Payment Code for failing to pay suppliers on time.
Screwfix, Prudential, British American Tobacco, BAE Systems, BT and British Gas owner, Centrica, were among 18 companies who 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 were removed or suspended in April, including Vodafone and engine maker Rolls Royce.
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.”
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 who bids for a Government contract above £5 million a year 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.
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.
A Screwfix spokesperson: “Since signing up to the Prompt Payment Code in 2012, Screwfix has improved payment terms for all small and medium suppliers who are paid within 30 days. In addition, all suppliers who supply goods not for resale are also paid within 30 days.”
A BAE Systems spokesman said: “We are committed to paying our suppliers promptly and on a consolidated basis, across the nine legal entities which we report, over 90% of invoices received are paid within 60 days; however we acknowledge there is room for improvement in some areas and we are taking action to ensure we consistently adhere to the highest standards of payment practices.”
A Prudential spokesperson said: “There are a variety of situations where it may not be possible to complete settlements within ‘prompt’ periods and we look to keep any supplier informed when that is the case.
“Other than this, where we have fallen short in settlements in line with terms and conditions of engagement we will of course look into why that was the case and seek to rectify our procedures accordingly”
A BT spokesperson said: “We have agreed a plan with the Chartered Institute of Credit Management (CICM) to achieve 95% of payments within 60-days and we’ve already begun work on its implementation. We expect to be reinstated when it is completed.”
A spokesman for Centrica said: “We have made significant investment in our processes with the aim of consistently paying our suppliers by the contractually agreed date. We expect to do so consistently in the future.”
Full list of companies:
Severfield (Design & Build) Ltd
Stantec UK Limited
British American Tobacco (Holdings) Limited
Galliford Try PLC
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
AB World Foods