Industry giants shamed over late payment

Aaron Morby 3 years ago
Share

Seven major contracting firms have been removed or suspended from the Government’s Prompt Payment Code for failing to pay suppliers on time.

Around 17 UK companies were shamed during the last three months for failing to meet standards set by the Chartered Institute of Credit Management.

Over a third of the firms hit by the purge on payment performance came from construction and are major players.

The most serious action taken by the Chartered Institute of Credit Management, which runs the scheme on behalf of the Government, has been taken against John Sisk & Son.

It has been kicked out of the Prompt Payment Code, while six other firms have been suspended for unfairly treating suppliers.

They include industry majors: Balfour Beatty, Costain, Engie Services, Interserve Construction, Kellogg Brown & Root and Laing O’Rourke.

From the housing sector, one of the industry’s most profitable businesses, Persimmon Homes has also been suspended.

The Prompt Payment Code was created by the UK government in 2008 in response to a call from businesses for a change in payment culture.

Businesses suspended from the Code have been invited to produce an action plan setting out how they will achieve compliance within an agreed period.

When they have achieved compliance their status as a Code signatory will be reinstated. If they do not, then they will be removed.

Philip King, chief executive of CICM, 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.”

The round of suspensions builds on a government announcement in November, where failure of companies to demonstrate prompt payment to their suppliers could result in them being prevented from winning government contracts.

From September this year, any supplier who bids for a government contract above £5m per annum will be required to answer questions about their payment practices and performance.

The expected standard is to pay 95% of invoices in 60 days across all their business.

Any supplier who is unable to demonstrate that they have systems in place that are effective and ensure a fair and responsible approach to payment of their supply chain may be excluded from bidding.

Kelly Tolhurst, Minister for Small Business said: “The Prompt Payment Code is a positive force for good and by naming transgressors we are supporting small businesses in the supply chain.

“We remain committed to supporting small businesses against poor payment practice and are delighted to see that the Prompt Payment Code Compliance Board has acted to expose those whose payment practices fall outside of their obligations to treat suppliers fairly.”

Latest news

Keltbray gets start date for £50m motorway upgrade

Contractor hails "significant step forward" for highways business
9 hours ago

Site workers settle for 5% pay increase

Contractors and unions agree one-year deal following months of talks
1 day ago

Rising wages and skills gap to overshadow materials issues

Materials and product Inflation tops 20% so far this year, but labour set to be next big headache
13 hours ago

Erith pays £2.8m bonus to staff after ownership switch

Around 450 staff have on average received over £6,000 since move to employee ownership five years ago
14 hours ago

Algeco lands £19.2m Leeds modular school scheme

Offsite specialist will supply and install 192 steel frame modules
14 hours ago

Eight firms placed on £750m Midlands and Eastern framework

Next generation framework for jobs up to £7.5m employs a parallel plotting structure
14 hours ago

Aston Villa unveil plans for £100m stadium expansion

Construction set to start next year on first phase of Villa Park upgrade
14 hours ago

Skanska bans ‘swing-up’ lorry loaders after site death

Banned vehicles are used mainly to deliver bulky items like cabins and welfare units
1 day ago

HS2 agrees £78m variation on Euston tunnels cost

Skanska Costain Strabag seals extra payment for agreed changes to the scope of work
2 days ago

B&K breaks ground at £150m Newcastle HMRC job

Work gets underway on city's largest ever office project
2 days ago

New building safety laws come into force today

Leaseholders protected and new regulator for construction product manufacturers in wake of Grenfell
2 days ago

Peel submits plan for £150m cannabis production plant

Isle of Man seeks to become a leader in the emerging medicinal cannabis sector.
2 days ago

Tarmac buys first electric concrete mixer truck

Country's first battery powered mixer truck will start site deliveries this Autumn
2 days ago

Tilbury Douglas wins Dorset hospital upgrade

Construction could start in 2024 after Dorset County Hospital secures £77.3m of funding
2 days ago

McGee in £2.4m provision for bid-rigging probe

Demolition contractor says provision will cover the expected fine over cover pricing ring
3 days ago

First designs for £275m HS2 Midlands nerve centre

Contractor due to be named in Autumn next year for Washwood Heath hub
3 days ago

London Bankside Yards next project switches from resi to offices

Revised plan submitted for 18-storey office next to Blackfriars Bridge
3 days ago

Plans in for Cambridge North major mixed-use scheme

Over 400 homes and nearly 600,000 sq ft of office and shops planned for railway sidings site
3 days ago

Barratt falls foul of planners on £25m estate

Council acts after residents complain about construction deliveries
3 days ago

VolkerHighways and WJ Group shot blast roads with steel

Latest retexturing technique provides benefits all round
3 days ago

Ten demolition firms named in cartel probe

Biggest names in demolition face massive fines over "unacceptable" behaviour on 19 contracts worth over £150m
6 days ago

Imtech vows to avoid big resi jobs after return to profit

Engineering services arm puts trio of loss-making residential jobs behind it
6 days ago

Sisk replaces Morgan Sindall on £1bn Midlands Highways Alliance

Four firms secure places in Midlands framework renewal race
6 days ago

Winvic wins Bristol Redcliff Quarter 468 flats job

Grainger buys planned build to rent project and brings in Winvic to start this Autumn
6 days ago

Peel takes on Wirral Waters after Urban Splash modular collapse

Developer is reviewing whether to return to traditional build methods after modular specialist collapse
6 days ago

Kier launches £80m JV to build 2,000 homes by 2027

Property arm JV with Lloyds fund to develop housing on urban brownfield sites
7 days ago

Mace chief Reynolds replaces Mitchell at CLC

Mark Reynold takes over as co-chair of the Construction Leadership Council
6 days ago

Cost inflation forces bid rethink for £200m M5 junction 10

ECI simplified and amendments made to reflect rising construction costs
7 days ago

Wages among key trades keep pace with cost of living rise

Self employed plasterers, plumbers, roofers and scaffolders enjoy wage rises ahead of annual inflation rate
7 days ago

Midgard drives recovery at JRL Group

Revenue tops £600m again at diversified contractor
1 week ago

Contractor services