Vodafone UK and Atos IT Services are among 12 firms suspended for not paying their suppliers in line with the Prompt Payment Code (PPC), under which 95% of supplier invoices are paid within 60 days.
Both companies were informed before their ‘suspension,’ which is preferable to ‘removal’ and affects five other firms that declined to offer an ‘action plan.’
Businesses suspended from the Code are invited to produce an action plan setting out how they will achieve compliance with the Code 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.
A spokesman for the Charted Institute of Credit Management, which administers the PPC, said,
“This is the first time that suspensions/expulsions have been formally announced. The purpose of the code is to encourage best practice and it is therefore pleasing to see how some of the companies have responded positively to approaches from the PPC Compliance Board.”
The institute’s chief executive Philip King expressed ‘disappointment’ that some suppliers are being treated unfairly on payment practices by now-former PPC signatories.
He said that he took “no satisfaction” in naming the five publicly, although all are prior suspendees who either failed to offer an action plan or failed to engage with the institute.
More removals and suspensions are expected in the second phase of the CICM’s review , which is currently underway, as the 17 firms named so far were for payment practices in Q1 2019.
The five companies removed are:
- BHP Billiton – a global resources firm
- DHL – a global logistics company
- GKN Plc – a multinational aerospace and automotive components group
- John Sisk & Son Ltd – an international construction firm
- R. Twining and Company Ltd – a tea and coffee business
The 12 companies suspended are:
- Atos IT Services UK&I – an IT services business and main UK subsidiary of Atos SE
- Balfour Beatty Plc – an international infrastructure giant
- British Sugar UK – a sugar producer
- Costain Ltd – a construction and engineering firm
- Engie Services Ltd – a facilities management services group, owned by Engie Group
- Interserve Construction – a construction firm part of Interserve Group Ltd
- Kellogg Brown & Root Ltd – a facilities management and construction engineering giant
- Laing O’Rourke – an international engineering company
- Persimmon Homes Ltd – a property building outfit
- Rolls-Royce Plc – an engineering giant
- SSE – a gas and electricity provider
- Vodafone Ltd – a telecoms firm, owned by Vodafone Group Ltd.
The disclosure of the 17 firms breaching the PPC follows a government pledge that from this September, firms not paying suppliers promptly could be barred from government contracts.
A Vodafone spokesperson said:
“Our policy is to pay all small suppliers, and subcontractors to our public sector customers, within 30 days. We are proactively moving suppliers who we identify as small to these 30-day terms. We also already offer financing for small suppliers with cash flow concerns, provide an online help service and an automated system to speed up payments.
“As a UK-based multi-national company, we do have some longer payment terms with very large organisations, for example, delivering complex IT and network projects over a number of years. We are explaining our numbers to Government and the appropriate bodies whilst continuing to make improvements.”
