Fintech meet up
Out-Law News | 30 Oct 2014 | 3:24 pm | 1 min. read
Representatives from Barclays, Aviva, City of London Corporation and Fujitsu are amongst those appointed to a new 'advisory board' which will take the lead on strengthening the code and its enforcement. The government said that the board, which was appointed based on its members' good reputations on payment practices, would publish more details of its role in the spring.
"Late payment continues to plague businesses, putting a strain on cash flow and preventing plans for growth," said Matthew Hancock, the business minister.
"We have committed to tackling this problem, but there is no silver bullet. This is about a change in culture, which needs businesses and governing to work together. The new advisory board will strengthen the Prompt Payment Code, cracking down on poor practice and showcasing good practice," he said.
The government-backed Prompt Payment Code was set up in 2008 by the Institute of Credit Management as a voluntary agreement promoting good payment practices. Code signatories, including a number of FTSE 100 businesses, are obliged to pay suppliers within an agreed time and to make sure that they have proper processes in place for any issues that may arise. More than 1,700 businesses and public authorities have committed to the Code to date.
Late last year, the government published a discussion document and sought views on whether more could be done to change the culture of late payment to small suppliers. The decision to create the advisory board follows calls for a more robust and active Prompt Payment Code in response to that paper. The Small Business, Enterprise and Employment Bill, which is currently before the UK parliament, also contains measures to cut down on late payments in response to the paper, including a new requirement for bigger businesses to publish details of their payment terms for suppliers.
Initially, the new advisory board will have three main duties in relation to the Prompt Payment Code: to improve monitoring and enforcement; promote awareness; and provide advice on whether updates are needed. Its first members are Aviva, Barclays, Bury Council, City of London Corporation, the Confederation of British Industry, the Forum of Private Business, Fujitsu, Greggs, the Institute of Directors, Skanska and Stort Chemicals Ltd.
ICM chief executive Philip King, who will act as co-chair of the new advisory board, said that "the timing is now right" for the Prompt Payment Code to be strengthened.
"The launch of a dedicated Prompt Payment Code Advisory Board is both a positive and exciting step," he said. "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."
Fintech meet up