Eight big-name construction firms have been removed or suspended from the government’s Prompt Payment Code (PPC) during the past quarter for failing to pay suppliers.
Over a third of the firms hit by the purge on payment performance came from construction and are major players.
The Chartered Institute of Credit Management (CICM), which runs the scheme on behalf of the government, reported that the most serious action has been taken against John Sisk & Son. The international construction company was removed from the PPC, with seven other firms have been suspended for unfairly treating suppliers.
Those suspended include key industry players Balfour Beatty, Costain, Engie Services, Interserve Construction, Kellogg Brown & Root and Laing O’Rourke. Additionally, leading housebuilder Persimmon Homes has also been suspended.
The government introduced the PPC back in 2008 in response to calls from businesses for action to be taken to change the payment culture. The code includes a commitment to pay 95% of all supplier invoices within 60 days.
Those businesses suspended from the code will now have to produce an action plan outlining how they will achieve compliance within an agreed period. Once they achieve compliance, their status as a code signatory firm will be reinstated. However, if they do not then they will be removed.
From 1 September 2019, 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.