Taking the next steps in banning retentions and developing a more collaborative relationship with suppliers and sub-contractors, Network Rail has followed the lead of Highways England, which has been using PBAs for years with strong results.

Rudi Klein, SEC Group chief executive, stated: “It is great to see large and influential public sector clients like Network Rail supporting best practice. We hope that others will follow, as there is still widespread payment abuse for SMEs in the construction and infrastructure supply chain. It will be a great lost opportunity if we do not all learn from Carillion’s failings.

We particularly welcome Network Rail’s new monitoring processes and we would like to see their stand on retentions followed throughout their supply chain. Public sector procurement has a key part to play in reforming this outdated practice. However, until everyone abolishes retentions, we need urgently now an intervention like the Aldous Bill, to ensure that if retentions are deducted, they are protected and SMEs do not lose their cash.”

ECA chief executive Steve Bratt commented: “I am delighted to see such a positive development in the fight against unfair payment practices. Network Rail’s decision should signal to the wider industry that true change can, and must, happen. We urge as many clients as possible to follow suit, and show support for immediate reform.

“The unprecedented support for the Aldous Bill from over half a million businesses and trade body members, as well as one in four MPs, is also telling of the need for change. Network Rail will hopefully be the first of many clients to take bold steps towards fairer business practices and start to show that lessons have been learned from Carillion.”

BESA’s public affairs and policy manager, Alexi Ozioro, added: “Network Rail has shown exemplary leadership and foresight. This demonstrates not only that reform can happen, but can happen very quickly. If a major client like Network Rail can do it, so can everyone.”

The decision will afford greater protection and certainty of cash flow to supply chains, and will come into effect during the next funding period for Network Rail, which runs from 2019 to 2024, and will include around £48bn worth of projects.