A “massively underhand cash grab” was how one supplier was reported in The Times as describing the approach by the DIY giant B&Q demanding contributions to an “investment-for-growth” programme. B&Q is facing claims that it threatened its suppliers by demanding they pay hundreds of thousands of pounds to stay on its books.
This follows The Telegraph’s recent revelation that it has seen a letter from the FTSE 100 company Diageo, owner of Guinness and Johnnie Walker whisky, to its suppliers saying that from 1st February Diageo will extend the number of days it takes to make payments from 60 days to 90 days on all new contracts and tenders.
Against this bullying back-cloth, the Business Minister Matthew Hancock said yesterday that:
“Making small businesses wait an unreasonable time for payment is entirely unacceptable. I know first-hand the great burden that late payment can place on firms – and how it can strain family finances – which is why I am committed to stopping it.
“Big companies should lead by example and pay small suppliers within 30 days. I have already written to the FTSE 350 urging them to sign up to the Prompt Payment Code.
“Fairer payment practices will help small businesses grow and create jobs. This is a key part of our long-term economic plan to build a better Britain.
New legislation came into force on 25 February 2015. This means that every business in the public sector supply chain must now comply with 30-day payment terms, including suppliers and sub-contractors. This means that:
– everyone in the supply chain must comply with 30 day payment terms, including suppliers and sub-contractors
– public bodies must publish an annual late payment report, making their accountability more transparent
– the bidding process is simpler across the wider public sector – complex forms, such as Pre-Qualification Questionnaires, are now abolished for low value contracts
– the procurement process for public sector contracts will be quicker
– contracting authorities are obliged to publicly advertise opportunities on the new contracts finder website.