Agency halfway to £20bn goal of funding to be cleared within 19-days through project bank accounts
Highways England (HE) has awarded and paid subcontractors over £10bn of funding for schemes within 19-days through the use of project bank accounts (PBAs) in the last three years.
According to the Specialist Engineering Contractors’ Group, the method of payment has allowed HE to ensure that all supply firms - including sub-contractors and sub-sub-contractors - are paid within 19 days.
The body charged with maintaining and improving the UK’s strategic road network is halfway towards reaching the target of £20bn to be awarded through PBAs by the end of the decade.
PBAs aim to eliminate late payment by paying all firms down the supply chain from a single pot, removing the main contractors ability to manage the flow of cash downwards.
Other major public sector clients using PBAs include the Defence Infrastructure Organisation, Ministry of Justice, Highways Agency and the Environment Agency.
Professor Rudi Klein, CEO of the SEC’ Group said: “The construction industry owes a debt of gratitude to the team at Highways England that has been responsible for achieving this remarkable performance.
“Project bank accounts are the most effective mechanism for ensuring that supply chain SMEs are in regular and timely receipt of their cash. Other initiatives such as fair payment charters have proved to be a waste of time and effort.”
In February SEC Group published research that showed 38% of public sector clients were failing to pay first-tier contractors within 30 days - breaching late payment legislation.