NEWS
A quiet payment revolution ta
akes
L
ast year’s collapse of Welsh- based company Dawnus Construction has hastened
progress towards protecting SME payments in Welsh construction. I n December 2017 Mark Drakeford, then Cabinet Minister for Finance, launched a new project bank account policy “to support ethical business practices in government funded construction.”
All government funded projects in Wales above a £2 million threshold are required to have a project bank account (PBA). A PBA enables all fi rms in the supply chain to be paid from one “pot” without payments having to cascade through the diff erent layers of the supply chain. The monies are ring-fenced so that if there is an insolvency upstream small fi rms in the supply chain don’t lose out; in the Dawnus collapse almost £40 million was left owing to Dawnus’s supply chain.
At a recent event hosted by SEWSCAP, the largest value
framework in Wales, councils and contractors came together to determine how best to implement the policy on PBAs. Those who had already used PBAs indicated that they helped to ensure that payments to SMEs in the supply chain were discharged well within 30 days as well as being made secure.
Speaking on behalf of SEWSCAP
Kevin Shackson, who chaired the e vent, said he was delighted with the progress being made on using PBAs: “It’s such a commonsensical thing to do. Most of construction in Wales is actually delivered by small fi rms. They deserve proper payment protection since they provide a range of community benefits including local jobs and training.”
Speaking at the event Luke
Owen, managing quantity surveyor at Morgan Sindall’s Cardiff ffi said:? “As a large tier 1 contractor we fully support PBAs. Contrary to various adverse reports the costs and administration involved in setting up and operating them is minimal. On the positive side we fi nd that they help to improve the performance of our supply chain. We are grateful to SEWSCAP for bringing together public sector authorities, contractors, consultants and sub-contractors to work collaboratively to implement PBAs in South East Wales.” Cat Griffi
offi c e ffi th-Williams, nationa l
executive offi cer for the Specialist Engineering Contractors’ (SEC) Group Wales (representing engineering SMEs in Welsh construction) added: “Feedback from firms which have experienced PBAs has been amazing. They don’t have to wait months to get paid and they can commit to their work in the knowledge that their monies are secure.”
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