Administration races ahead of the rest of the UK in adoption
The Northern Ireland government has mandated the use of project bank accounts on all centrally procured construction contracts in the country.
Project bank accounts – a key part of the UK government’s construction strategy – is used by a number of clients in the UK including the Highways Agency and Defence Infrastructure Organisation, but Northern Ireland is the first national administration to fully adopt the payment method.
The payment method involves paying the whole supply chain from a single ring-fenced project bank account and is designed to stamp out late payment problems.
The UK government’s target is to spend £4bn through project bank accounts by 2014.
Northern Ireland finance minister Sammy Wilson said: “The executive recognises the strategic importance of the construction industry for Northern Ireland and the key role which is played by subcontractors.
“This is why we are significantly changing the way we pay many firms working on government construction contracts.
“Project Bank Accounts will accelerate their cash flow, and give certainty of payment timing.
“They will also allow the benefits of public investment to be pushed further down the supply chain to subcontractors who, in many cases are fundamental to the work on many construction contracts.
“Collectively government is the largest client of the industry and it is essential that we do everything we can to reimburse suppliers quickly and to minimise the potential collateral impacts that can be caused when a construction firm enters administration.”