WPP chiefs’ victory parade for scooping the Centrica global integrated account could well be cut short after it has been revealed that the British Gas owner and BT – another major WPP client – are among 18 large businesses that have been exposed as late payers.
Centrica, BT, Prudential, Screwfix, Fujitsu Services, BAE Systems and print giant De La Rue and 11 others have been suspended from a scheme that promotes fair treatment of suppliers after being accused of “unethical” conduct.
They have also been removed from the prompt payment code, a government-backed pledge to pay suppliers’ bills on time. The businesses were found to have breached a commitment to pay 95% of their invoices within 60 days.
All but one of the 18 companies have promised an “action plan” to improve their payment performance, according to the Chartered Institute of Credit Management, which runs the code for the government.
The laggard – AB World Foods, part of Associated British Foods which owns Primark, Allied Bakeries and Twinings – has so far failed to act.
The irony of the situation will not be lost on some; British Gas is currently running a campaign which flags up its support for charity Carers UK by highlighting the plight of the millions of unpaid carers in Britain.
CICM chief executive Philip King said: “We will continue to challenge signatories to the code if the obligatory payment practice reporting data suggests that their practices are not compliant.
“We are encouraged that of the 18 who have been suspended or removed today, all but one has already submitted action plans to achieve future compliance, and we are working closely with those businesses to support a better payment culture.”
Andy Chamberlain, deputy director of policy at the Association of Independent Professionals and the Self-Employed (IPSE), added: “The names on this list show how endemic late payment is across British industry. The self-employed are uniquely vulnerable to late payment, if they aren’t paid on time they have no income. The Government must keep its promises and quickly push ahead with its proposed action to end late payment.”
In March, WPP warned its agencies that they needed to improve cash collection from clients after the company’s balance sheet showed £17m worth of bad debt in the UK. Not that WPP has been whiter than white itself in the past. In 2017, the group was accused of putting the squeeze on key suppliers, including freelancers, by delaying payments in an effort to make its year-end results look healthier.
Meanwhile, a MarketInvoice study revealed that 48% of all payments made to creative industry companies were late in 2018, leaving the industry £1.1bn out of pocket. The research showed that a typical invoice worth £38,137 was being settled 13 days beyond payment terms, with one in seven companies exceeding the payment terms by 14 days.
However, from September 1, any company which bids for a Government contract above £5m a year will be expected to answer questions about their payment practices and performance. If they are unable to demonstrate that they are paying 95% of invoices within 60 days, they may be excluded from the process.
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