The construction industry in Scotland is set to benefit from the use of Project Bank Accounts (PBAs) on public sector projects which will help to speed up payments and boost cash flow through the supply chain.
Under the PBA system, which is due to be trialled later this year, first tier sub-contractors working on Government projects will no longer have to wait for main contractors to process their payment.
Instead they will receive payment electronically directly through a bank account specific to the project they are working on within five days of the date that the client deposits funds in the PBA.
The trial of PBAs is part of an early recommendation from the Review of Procurement in Construction which NSCC contributed to and it is set to report in the summer on how Scotland’s £2 billion public construction contracts are awarded.
The introduction of PBAs in Scotland follows Northern Ireland’s decision in January 2013 to make the use of PBAs mandatory on all public sector contracts worth more than £1 million.
The Cabinet Office also confirmed in March that it is exceeding its £2 billion target for construction PBAs in 2012/13 having paid £1.4 billion of work through PBAs in the last 6 months.