Representatives from Aviva, Barclays, Bury Council, City of London Corporation, Fujitsu, Greggs, Skanska and Stort Chemicals will be forming a new advisory board tasked with strengthening the Prompt Payment Code.
The Prompt Payment Code sets out principles for businesses to follow when dealing with and paying their suppliers. More than 1,700 businesses and public authorities have so far committed to these principles. This includes the representatives on the new board, who were selected because of their good reputations on payment practices.
The new Prompt Payment Advisory Board will:
- improve monitoring and enforcement of the Code
- promote awareness of the Code
- provide advice on whether there is a need to update the Code
Business Minister Matthew Hancock said:
Late payment continues to plague businesses, putting a strain on cash flow and preventing plans for growth. We have committed to tackling this problem, but there is no silver bullet. This is about a change in culture, which needs businesses and government to work together.
The new Advisory Board will strengthen the Prompt Payment Code, cracking down on poor practice and showcasing good practice.
Philip King, CEO of the Institute of Credit Management (ICM) and co-chair of the Prompt Payment Code Advisory Board said:
Having hosted and administered the Prompt Payment Code for BIS since its launch, we have seen the Code grow in stature, prominence and membership. The timing is now right for the Code to be further strengthened and developed as a key tool in helping to tackle the scourge of late payment and driving a change in business culture from top to bottom.
The launch of a dedicated Prompt Payment Code Advisory Board is both a positive and exciting step. It will allow individuals to bring their expert advice to the table and identify further improvements to support the creation of an environment where paying on time is the norm rather than the exception. I am delighted to be co-chairing the Board and look forward to working with my fellow Board members alongside Ministers and colleagues at the Department.
The Advisory Board has its first meeting today (28 October 2014) and will aim to implement concrete proposals in Spring 2015.
The government is also taking action to curb late payment through the Small Business, Enterprise and Employment Bill which is currently going through Parliament. The Bill contains proposals to create a duty for large companies and listed firms to report on their payment practices, as well as reforms to public procurement.
Notes to editors
- The Advisory Board members are: Aviva, Barclays, Bury Council, City of London Corporation, Confederation of British Industries, Forum of Private Business, Fujitsu, Greggs, Institute of Directors, Skanska and Stort Chemicals Ltd.
- The decision to create the Advisory Board follows calls for a more robust and active Code in response to a BIS discussion paper: Building a Responsible Payment Culture.
- The Code was established in 2008 following calls from business organisations to establish a set of principles that would commit businesses to paying on time and fairly. It is administered by the Institute of Credit Management on behalf of BIS. In response to the discussion paper, BIS committed to working with ICM to strengthen the Code.
- For more information about the Code go to the Prompt Payment Code website.
- Through the Small Business, Enterprise and Employment Bill which is currently being debated in Parliament, BIS is introducing legislation that will require large companies, large Limited Liability Partnerships and listed companies to report on their payment practices. This will increase transparency around how companies pay their suppliers.