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Drugs giant GlaxoSmithKline (GSK) has been reinstated on the Government-backed prompt payment code list nearly two years after being kicked off for failing to pay invoices in a timely manner.
The move comes just days after it was revealed that Tesco voluntarily left the code back in June days before tighter rules were introduced for large firms to pay 95% of smaller suppliers within 30 days, down from 60 days previously.
GSK’s turnaround in the past two years sees the company in line with the new rules, having previously only managed to pay 28% of suppliers within 60 days via its consumer healthcare division and just 12% via its overall UK business.
The Small Business Commissioner, whose office oversees the list of about 3,000 large business signatories, said the average small and medium supplier is paid within 18 days.
Liz Barclay, Small Business Commissioner, said: “It’s encouraging to see that GlaxoSmithKline recognises the value of being a signatory to the code, and as a result have put in the hard work to improve their payment practices.
“Since the Small Business Commissioner took on administration of the code in March 2020, we have seen more than 1,126 new signatories.
“I urge all businesses to demonstrate their commitment to ethical payment practices and become signatories to the code.”
John Foster, chief campaign director at the Confederation of British Industry said: “The pandemic has once again highlighted the importance of healthy supply chains.
“Small companies are the backbone of the UK economy yet remain most at risk from slow or late payments, particularly after months of cashflow pressure.”
Tesco’s decision to quit the list – five years after the company was engulfed in a scandal over misstated accounts linked to payments from suppliers in return for promotions – was criticised earlier this week.
Craig Beaumont, chief of external affairs at the Federation of Small Businesses told The Times, which broke the news: “Tesco’s shock decision is bad news for good corporate governance and for leadership.”
He added that the Groceries Code Adjudicator which regulates supermarkets’ treatment of suppliers, must “keep a close eye on Tesco’s payment practices with all small businesses under 50 employees. We can’t go back to the bad old days”.