16 January 2014 | Gurjit Degun
The Welsh Government has introduced a faster way of paying suppliers working on public sector construction projects.
The Project Bank Accounts (PBAs) are ring-fenced bank accounts with the sole purpose of acting as a channel for payment on construction projects to ensure that key members of the supply chain are paid on contractually agreed dates.
“This eases cash flow pressures for business and supports closer working within the supply chain,” the Welsh Government said.
It added that many businesses are dependent on main contractors ensuring “fair and prompt payment through the supply chain”.
Finance minister Jane Hutt said: “Boosting economic growth and creating jobs in the Welsh economy is a priority for this government.
“SME’s (small and medium enterprises) are a vital part of the construction sector in Wales, and many play critical roles through the supply chain in delivering our public sector construction contracts. Access to finance and cash flow are vital to smaller sub-contractors and it is only fair that they receive prompt payment in accordance with contract performance.
“The use of PBAs is an innovative way of ensuring fair payment throughout the supply chain within construction contracts, and will ensure that both main and sub-contractors are paid promptly for works performed.
“This is another example of my commitment to using public procurement policy to enable smaller businesses to prosper through delivery of contracts in Wales.”
Last October, the Scottish Government announced plans to trial PBAs.