14 September 2009

Northwest businesses urged to step up and pay fair

The Northwest Regional Development Agency (NWDA) Chairman Robert Hough and Regional Minister for the Northwest Phil Woolas have urged local businesses in England’s Northwest to pay fair and sign up to the Government’s Prompt Payment Code.

A number of local companies have already signed the Code, which commits them to pay their suppliers promptly as set out in their contractual agreements – regional business signatories include AstraZeneca, the Guardian Media Group and BASF (Stockport). Further signatories to the Code include all central Government departments and all nine RDAs.

The Agency has written to local councils, health bodies, public sector bodies and business groups in the region asking them to show their commitment to paying their supplier on time by signing the Code. Local authorities and health bodies in the region that have already signed the code include: Alder Hey Children's NHS Foundation Trust, Cumbria Partnership NHS Foundation Trust and Salford City Council.

Robert Hough, Chairman, Northwest Regional Development Agency (NWDA) said:

“In October 2008, the NWDA made a commitment to pay all invoices to suppliers within 10 days, which means we actually make payment in just 8 days, allowing 2 days for clearing through the banking system.

“As a business led organisation, the Agency has encountered first hand those companies that are feeling the effects of the economic downturn and is investing heavily in the financial support it offers to businesses in the region.

“By pulling together and encouraging more organisations and businesses to make the pledge, England’s Northwest will be in a much better position to weather the downturn and emerge stronger.”

Phil Woolas, Regional Minister for the Northwest said:
 
"The importance of cash flow to all businesses, especially small businesses is clear in the current climate. Most small companies say that they have already been affected in some way by the economic downturn.

“The success of small and medium sized businesses is vital for the prosperity of the region and these businesses need access to cash flow. I am encouraged that Government in the North West is building on its commitment to pay firms within 10 days by working with NHS trusts in England, local authorities and other public sector employers across the region to seek opportunities to extend the payment target. We want everyone in the public sector to pay their bills, especially to small businesses, more quickly."

Regional Business Minister, Rosie Winterton said:

“Prompt payment remains the biggest financial challenge faced by firms and was responsible for a staggering 4,000 UK companies going bust last year.

“It is critical that Government takes the lead and together with local businesses creates a better payment culture. That’s why in July central Government departments paid £17bn worth of invoices within ten days.

“I want to see more companies paying fair and signing up to the Prompt Payment Code.”

For further details on the Prompt Payment Code, a full list of Approved Signatories and details of how to join, visit www.promptpaymentcode.org.uk

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Notes to Editors:

For further information please contact Shelley Tattersall, Press Officer on 01925 400256 or mobile 07500 128482 or shelley.tattersall@nwda.co.uk For urgent out of hours press enquiries please call 01925 400259.

For further information and to view previous press releases visit us at www.nwda.co.uk/press

The Northwest Regional Development Agency (NWDA) leads the economic development and regeneration of England's Northwest and is responsible for:

• Supporting business growth and encouraging investment
• Matching skills provision to employer needs
• Creating the conditions for economic growth
• Connecting the region through effective transport and communication infrastructure
• Promoting the region’s outstanding quality of life

Details of signees to Code

Details of those businesses and organisations signed up to the code can be found: http://212.36.97.5/ppc/signatory.a4d
 
Explanation / definition of Code

Pay suppliers on time:
• within the terms agreed at the outset of the contract
• without attempting to change payment terms retrospectively
• with no change in either contractual payment terms or the usual payment period during the downturn

Give clear guidance to suppliers:
• providing suppliers with clear and easily accessible guidance on payment procedures
• ensuring there is a system for dealing with complaints and disputes which is communicated to suppliers
• advising them immediately if there is any reason why an invoice will not be paid to the agreed terms
 
Encourage good practice:
• by ensuring that contractual terms with lead suppliers include a requirement to ensure that the code is adopted throughout their own supply chains
 
How to sign
 
Go to: www.promptpaymentcode.co.uk
• Click on the ‘Apply’ button.
• Complete the on-line form with your details and nominate two referees to confirm you pay promptly
• Contact your referees to make sure they will support your application
• Let them know that they will receive an email asking them to confirm whether you pay promptly by clicking the YES button
• Encourage them to sign up too
 
Explanation of reference process
Businesses wishing to sign-up to the Code can do so as long as their application is supported by two of their suppliers. Referees will need to confirm that the applicant pays their invoices on time. ICM will review the ‘Approved Signatories’ twice a year to ensure that they are still paying their suppliers promptly. This will give the Code integrity and be a genuine indication of good practice.
 
Government department payment times

Government is committed to improving public sector payment performance and in July, central Government departments paid nine out of ten invoices within ten days – that’s £17billion worth of payments reaching business quicker than ever.

Health bodies include

• Strategic Health Authorities
• Primary Care Trusts
• NHS Trusts Foundation Trusts