Businesses and the public sector will lead a new advisory board designed to strengthen the Prompt Payment Code (PPC), the government has announced.
The PPC is a government-backed scheme aimed at prompting businesses to pay their suppliers on time and avoid late payments. More than 1,700 firms and public bodies have signed up to the principles of the PPC so far.
Despite the PCC, late payment is still a problem for small businesses. In July 2014 a study by Bacs Payment Schemes found that 60% of SMEs have trouble with late payments. The advisory board will look at:
- improving how the code is monitored and enforced
- raising awareness of the code
- give advice to the government about whether the PPC needs to be updated.
Business Minister Matthew Hancock said:
“Late payment continues to plague businesses, putting a strain on cash flow and preventing plans for growth. We have committed to tackling this problem, but there is no silver bullet. This is about a change in culture, which needs businesses and government to work together.
“The new Advisory Board will strengthen the Prompt Payment Code, cracking down on poor practice and showcasing good practice.”
Philip King, chief executive of the Institute of Credit Management, said:
“The launch of a dedicated Prompt Payment Code Advisory Board is both a positive and exciting step. 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.”