Major supply chain companies working in Cumbria have been suspended from the Prompt Payment Code for failing to pay their suppliers on time.

Infrastructure, construction and engineering giants Balfour Beatty Plc, Costain Limited, Laing O’Rourke and Rolls-Royce Plc were among the 12 businesses suspended from the PPC, which is administered by the Chartered Institute of Credit Management (CICM) on behalf of the Government.

Facilities management and construction engineering company Kellogg Brown and Root Limited has also been suspended in the last quarter.

The company was recently selected as one of four big hitters to lead the Programme and Project Partners (PPP) framework at Sellafield, which is designed to improve the speed and effectiveness of project delivery on the complex nuclear site in West Cumbria and bring greater stability in the design and construction supply chains.

Persimmon Homes Limited; Interserve Construction, part of Interserve Group Limited; Engie Services Limited, part of Engie Group; electrical and telecoms provider SSE; Vodafone Limited; Atos IT Services UK&I; British Sugar UK were the others to be suspended.

The CICM said all of the suspended businesses have been invited to produce an action plan to fall back in line with the Code, with some already making progress.

Businesses who achieve compliance will be reinstated, while those that do not will be removed completely, it added.

Global logistics business DHL and multinational aerospace and automotive components business GKN Plc were among the five to be removed completely in the last quarter, with the CICM saying more removals and suspensions are set to follow as it undertakes a second phase of reviews.

It regularly reviews the data reported by large companies under the Payment Practices Reporting Regulations to ensure they are upholding their commitments. 

Thousands of companies have signed up to the PPC, pledging to uphold best practice for payments standards in a bid to tackle the scourge of late payments, which has a particular impact on smaller businesses. The Code includes a commitment to pay 95 per cent of all supplier invoices within 60 days.

CICM chief executive Philip King, who chairs the Prompt Payment Code Compliance Board, Philip King vowed to continue challenging signatories of the Code.

Fellow Board member and Small Business Commissioner Paul Uppal added: “It is essential the code has credibility and demonstrates a commitment to ensure small businesses are treated fairly. 

“My team has already recovered more than £3.5 million in late payments and is ready and available to support small businesses experiencing poor payment practices”. 

Pressure continues to grow on late paying businesses, with further reforms to the PPC under consideration.

From September 1, any supplier who bids for a Government contract above £5 million per annum will be required to answer questions about their payment practices and performance. Those who come up short could be excluded from bidding.

Kelly Tolhurst, Minister for Small Business said: “The Prompt Payment Code is a positive force for good and by naming transgressors we are supporting small businesses in the supply chain. 

“We remain committed to supporting small businesses against poor payment practice and are delighted to see that the Prompt Payment Code Compliance Board has acted to expose those whose payment practices fall outside of their obligations to treat suppliers fairly.”