Business - Payment code slated

The Institute of Directors has called on ministers to overhaul the late payment complaints procedure of the Better Payment Practice Group, writes Nick Huber.

The call comes as the BPPG struggles to free itself from a bitter six-month dispute over Rentokil’s 60-day payment policy and faces allegations that its complaints procedure is ineffective.

In a letter sent earlier this month to the trade department’s Callum Johnston, the civil servant who sits on the BPPG, the IoD said that since the group is not a legal entity, it lacked the authority to police the code designed to promote prompt payment.

Under the existing complaints procedure, a complaints administrator decides whether to investigate a written complaint about a member, which is then examined by three organisation members. If the complaint cannot be resolved, the Local Authorities Co-ordinating Body on Food and Trading Standards decides whether the company should be banned from using the BPPG logo.

The IoD attack comes as the group struggles to draw a line under deep divisions over Rentokil Initial’s 60-day payment policy. Although the BPPG has accepted Rentokil’s revised payment policy, involving higher interest payments to compensate suppliers for late bills, the Forum of Private Business still believes Rentokil is breaking the group’s payment code and the Late Payment Act. It has sent a formal complaint to the BPPG complaints administrator.