Prompt Payment to be Duplicated by ‘Fair Payment’?
The announcement of the Government’s plan for a ‘fair payment’ code, to accelerate payments to sub-contractors on public construction projects, has received a cautious reception from the Institute of Credit Management (ICM) and Bacs Payment Schemes Limited (Bacs), already working in partnership to build awareness of the issue of late payments in the UK, through the Prompt Payment Code.
Launched in 2008, the Prompt Payment Code is hosted and administered by the ICM, on behalf of the Government’s Department for Business Innovation and Skills (BIS). The Code is designed to encourage and promote best practice between organisations and their suppliers and a recently launched BIS guide to getting paid on time is part of the marketing programme designed to promote the Code.
Philip King, chief executive of the ICM, says:
“While we welcome all initiatives designed to help address the issue of late payments, the Government’s latest plan appears to duplicate the efforts of the Prompt Payment Code, launched only two years ago.”
“There are already 917 voluntarily signatories to the Prompt Payment Code, 27 of which are operating in the construction industry, and our work in partnership with Bacs is set to drive this membership further.”
Latest research from Bacs, the not-for-profit organisation behind Direct Debit and Bacs Direct Credit, shows that British SMEs are currently having to wait an average of 41 days longer than their original agreed payment terms, before invoices are paid.
Mike Hutchinson, head of marketing for Bacs, says:
“Bacs has invested heavily in researching the issue of late payments in recent years. Our new partnership with the ICM and Prompt Payment Code will see more efforts being channelled into building awareness and directly impacting payment practices.”
All members of the Prompt Payment Code undertake to pay suppliers on time, within the terms agreed at the outset of the contract, without attempting to change payment terms retrospectively.
Other supporters of the Prompt Payment Code include the British Chambers of Commerce, Confederation of British Industry, Forum of Private Business, Federation of Small Businesses, Institute of Directors and several major banking organisations.
The Prompt Payment Code is hosted by the ICM at www.promptpaymentcode.org.uk