Leader North East business Greggs is to play a key role in strengthening the official code which sets out principles for business to follow when dealing with or paying their suppliers.
The food-on-the-go retailer, which turns over around £800m annually, has been appointed to a new advisory board on the Prompt Payment Code, which will be tasked with helping ensure suppliers are paid on time and treated fairly.
Formed just weeks after the launch of The Journal’s Pay Fair campaign, it has already had its first meeting and will aim to implement concrete proposals in Spring 2015.
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.”
Also on the board are representatives from Aviva, Barclays, Bury Council, the CBI, City of London Corporation, Skanska, Stort Chemicals, the Forum of Private Business and the Institute of Directors.
All have signed up to the Prompt Payment Code - supported by more than 1,700 businesses and public authorities - and were selected for the role because of their good reputations on payment practices.
In particular, the new board will be tasked with:
- improving the monitoring and enforcement of the code;
- promoting awareness of it; and
- providing advice on whether there is a need to update the document.
Philip King, chief executive of the ICM and co-chairman of the new board, said: “Having hosted and administered the Prompt Payment Code for BIS since its launch, we have seen the code grow in stature, prominence and membership.
“The timing is now right for the code to be further strengthened and developed as a key tool in helping to tackle the scourge of late payment and driving a change in business culture from top to bottom.
“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.”
The news comes after Greggs’ finance director Richard Hutton told The Journal that a responsible and ethical approach to dealing with companies in its supply chain had helped the firm boost efficiency while projecting the right message to the consumer.
He said: “If you can provide certainty over when someone will receive payment, it gives them the confidence to build their own businesses.”
Every year, Greggs spends around £400m with suppliers, including everyone from landlords and utility firms to those providing ingredients.
As well as creating the new advisory board, the Government is taking action to curb late payment through the Small Business, Enterprise and Employment Bill, which is currently going through Parliament. On top of reforms to public procurement, the Bill contains proposals to create a duty for large companies and listed firms to report on their payment practices.
Through the Pay Fair campaign, The Journal is encouraging North East companies of all sizes to take a responsible and ethical approach to paying firms within their supply chain.
We are asking firms to sign the Business Ethics Pledge created by the North East Institute of Business Ethics, thereby agreeing to join with others to discuss the value of business ethics and to work with each other to transform their working environments for the better.
For more information, see http://www.nibe.org.uk/