Business minister Michael Fallon has written to all FTSE 100 and FTSE 250 companies telling them that if they do not sign up to the Prompt Payment Code, a voluntary agreement to promote good payment practices, he will publicise their refusal in the new year.
Companies being told to sign up include: major contractors Interserve, Galliford Try, Carillion and Kier; housebuilders Barratt, Berkeley, Bovis Homes, Persimmon, Redrow and Taylor Wimpey; support service companies Mitie and WS Atkins; and materials suppliers Wolseley, Howden Joinery, SIG and Travis Perkins.
The only FTSE 250 construction company to have signed up to the code already is Balfour Beatty, which did so in July 2010. Other major construction signatories include Willmott Dixon, Skanska UK, Morgan Lovell and Miller Construction. (See full list below.)
Mr Fallon said: “Late payment causes real cash flow problems for entrepreneurs. It stops them from growing their business – we need to change the culture.
“Too many of our biggest companies are ignoring the Prompt Payment Code. My message to them is clear - make prompt payment a priority or face the consequences of being named. I’m confident that driving up support for the common sense principles in the Code will have a very positive effect.”
Currently 1,182 companies are signed up to the Prompt Payment Code. However, only 27 FTSE 100 companies and five FTSE 250 companies are signatories.
Forum of Private Business chief executive Phil Orford welcomed the minister’s invention. He said: “All too often we see a ‘domino effect’ of late payment right down the supply chain. It decimates cash flow and forces many firms into administration - so it is important that we do whatever it takes to reverse this trend and set in motion a culture of prompt payment for small businesses and the economy as a whole.”
A debate on prompt payment issues takes place in Parliament today (Thursday 8 November 2012).
Businesses can sign up to the Prompt Payment Code now at http://www.promptpaymentcode.org.uk/
The good guys
The follow construction companies have already signed up to the code and commit to paying suppliers on time.