The board will focus its efforts to improve promote awareness of the Prompt Payment Code and monitor how companies are adhering to it. The board also will provide advice on whether the Code needs to be updated.

The code sets out principles for businesses to follow when dealing with and paying their suppliers. More than 1,700 businesses and public authorities have so far committed to these principles.

On the board will be representatives from Aviva, Barclays, Bury Council, City of London Corporation, Fujitsu, Greggs, Skanska and Stort Chemicals.

Business Minister Matthew Hancock says the new advisory board will be “cracking down on poor practice and showcasing good practice”.

Philip King, chief executive of the Institute of Credit Management and co-chair of the Prompt Payment Code Advisory Board, says it is time for the Code to be strengthened.

The Advisory Board held its first meeting on 28 October and aims to implement concrete proposals by next spring.

The government also says it is acting to curb late payment through the Small Business, Enterprise and Employment Bill which is going through Parliament.

This Bill contains proposals to create a duty for large companies and listed firms to report on their payment practices, as well as reforms to public procurement. These measures should increase transparency about how companies pay suppliers.

Recruiter reported in June that late payment has long been a problem in the construction sector. 

Mike Wynn, managing director of Construction and Property Recruitment, told Recruiter that he would like the government to make it compulsory to pay suppliers within between 35 and 45 days.