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PBAs tackling payment abuse

Research shows that project bank accounts are making in roads into construction payment abuse.

Three years ago the demise of Carillion highlighted the extent of payment abuse in the UK construction industry. In an effort to counter this public sector construction procurers have been using project bank accounts (PBAs)  to ensure that SMEs in construction supply chains receive their due payments.

Now research carried out by the Specialist Engineering Contractors’ (SEC) Group and Constructing Excellence has revealed that PBAs are gaining traction across the whole of UK construction. With the publication of the Government’s Construction Playbook – which will be the best practice manual for public sector construction – both organisations believe that this amounts to a significant booster to improving supply chain performance and promoting building safety.

SEC Group’s chief executive, Professor Rudi Klein, and head of constructing excellence, Alison Nicholl, jointly issued a statement praising all those public sector clients either regularly using them or proposing to use them:

“We have come a long way since PBAs were first mooted almost 20 years ago as an effective method for curbing payment abuse. Our research shows that PBAs have entered the mainstream as far as public sector construction is concerned; we now encourage private sector clients to follow suit. A major benefit of PBAs is that they encourage collaborative working since the supply chain does not have the distraction about whether or not they will be paid”.

ENDS

21 December 2020

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