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G4S persistent late payment practices revealed in Small Business Commissioner investigation report

Published 22 May 2019

The Small Business Commissioner, Paul Uppal, has published a report highlighting poor payment practices exercised by G4S against a small business supplier.

The small business complainant who requested anonymity, provided consultancy services to G4S Regional Management (UK & I) Ltd. The small business contacted the Office of the Small Business Commissioner to log a formal complaint after G4S failed to pay the invoice for delivery of the £31,880.49 project.

Consequent to the Commissioners involvement G4S investigated immediately and released payment, including statutory interest for late payment fees for the outstanding invoice on the same day nonetheless, this was 29 days outside the contractual agreement of 60 days.

G4S claimed this was an isolated incident and a simple case of human error however, further evidence submitted by the complainant proved persistent late payment on undisputed invoices dating back to April 2017. In light of this new information the Commissioner offered G4S an opportunity to provide further representations.

Small Business Commissioner, Paul Uppal, commented: “G4S is the largest outsourcing company in the UK and have a responsibility to lead by example and demonstrate timely payment practices to ensure small businesses are not left disadvantaged.

“G4S claim to have transparent payment practices however, based on the factual evidence of this complaint it is clear that they have further steps to take to ensure they are consistently compliant in paying promptly.

“The publication of my report should serve as a deterrent to other TIER 1 entities making similar omissions and encourage large business to adopt a responsible payment culture within their supply chain.”

Ian Cass, Managing Director for the Forum of Private Business, commented: “G4S are a large prestigious business within the UK economy and spend millions of pounds with numerous suppliers who are small businesses, like many of our Forum members. If G4S pay late it has negative implications to the cash flow of these small businesses.

“As a major government contractor, I hope that G4S will react positively to this report and review their payment terms to implement best practice and set a good example to others in a bid to help change UK payment culture for the better.”

Philip King, Chair of the Prompt Payment Code, commented: “G4S is a signatory to the Prompt Payment Code, but as yet there has been no challenge to its appointment or its payment behaviour from individual suppliers or their representative trade bodies.

“The Small Business Commissioner has identified adverse information regarding G4S’ treatment of suppliers and we will work with him to urgently review the position of G4S as a signatory and take the appropriate action.

“As we demonstrated with the suspension and removal of 17 businesses recently, signatories must meet the criteria to which they have voluntarily committed or the PPC Compliance Board will take decisive action.” 

Steve Poole, G4S Head of Transactional Services commented: “G4S has over 5,000 suppliers in the UK and receives 250,000 invoices a year. We are committed to honouring the payment terms as agreed with our suppliers. We have also made significant investment in our payment software, staff training and ticketing systems to ensure our suppliers are paid promptly.

“G4S takes its responsibilities seriously regarding the payment of suppliers to support cash flow and their role within our supply chain.”

The Managing Director, of the Small Business commented: “G4S were a good client, all of the senior staff that I worked with were professional and treated us with respect. However, G4S let themselves down with the payment practice of their shared service finance centre, which involved time and stress for me in repeatedly chasing payments. It’s a real shame that happened otherwise I would be happy to work with them again.”

If you are a small business experiencing late payment issues with G4S, or any other large business please contact the Office of the Small Business Commissioner.

The Small Business Commissioner’s report can be viewed here

ENDS

Contact: Manveer Mann on 0121 695 7761

Editors Notes

The Office of the Small Business Commissioner was launched in December 2017 to ensure fair payment practices for Britain’s 5.7 million small businesses, support them in resolving their payment disputes with larger companies and bring about a culture change in payment practices between businesses and across sectors.

In addition to investigating complaints about late payment issues, the Office provide a variety of free and impartial services such as:

  • Resolving disputes and dealing with unpaid invoices
  • Checking contracts and getting invoices right
  • Signposting small businesses to existing support and dispute resolution services
  • Interest Calculator on its website – allowing small firms to calculate interest owed on unpaid invoices.

* Legislation imposed in April 2017 required all large businesses to publish their payment practices.

www.smallbusinesscommissioner.gov.uk