Skanska is one of eight organisations – ranging from bakers to bankers – represented on a new Prompt Payment Advisory Board that has been set up by the Department for Business, Innovation & Skills (BIS) in a bid to strengthen the Prompt Payment Code.
Only 250 companies in the construction sector have signed the code since it was set up more than four years ago and there is evidence to suggestion that few are totally committed to its principles.
A recent survey by campaign group Streetwise Subbie surveyed 216 specialist contractors and found that 95% were being paid in excess of 30 days on publically funded projects, despite government’s ’30 day payment promise’. On private sector projects, fewer than 9% are getting paid within 30 days. (See our report here.)
Skanska was selected to serve on the new advisory board “because of their good reputation on payment practices”, BIS said. The other organisations are Aviva, Barclays Bank, Bury Council, City of London Corporation, Fujitsu, Greggs and Stort Chemicals.
The Prompt Payment Advisory Board, which met for the first time yesterday, has been tasked with putting forward proposals for:
- improving monitoring and enforcement of the Code
- promoting awareness of the Code
- advising 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.”