Long-running issue has come in to focus following Carillion collapse
Trade bodies are promising to keep up the pressure on business secretary Greg Clark to introduce project bank accounts on all public sector jobs.
The Specialist Engineering Contractors’ (SEC) Group, who has been petitioning for the use of project bank accounts for a number of years, has been backed by the Federation of Small Businesses (FSB) in the wake of the construction conglomerate’s failure.
The FSB has written to Clark (pictured) urging the government to use project bank accounts on public sector projects.
The accounts enable all those working on a particular job to be paid out of one pot – a ring-fenced bank account.
SEC chief executive Rudi Klein said: “I [have] told Greg Clark that if project bank accounts had been in place across the public sector before Carillion’s collapse the losses would be significantly less. He said he couldn’t disagree.”
Klein said the method was being used in other parts of the world including Australia where project bank accounts were introduced for public sector works at the beginning of the month and will be introduced on private sector jobs from next January.