Project bank accounts for major contracts could alleviate current economic crisis
Lord O’Neill of Clackmannan, president of the Specialist Engineering Contractors’ Group, has thrown his weight behind the use of project bank accounts for major construction contracts. This concept could transform the UK industry and do a very great deal to alleviate the current economic crisis.
Speaking at a conference in the Scottish Parliament in January, Lord O’Neil explained that ‘against a background of rising insolvencies, bad debt, lack of availability of borrowing facilities and credit insurance’, the use of project bank accounts would ensure ‘that the cash is safe for the whole project delivery team’.
He reminded his audience, ‘The Governments at Westminster and in Edinburgh have announced their intention to pay suppliers within 10 days. ‘The problem, as always , is to ensure that this is implemented along the supply chain. Project bank accounts can help to deliver this policy aim.
He added that project bank accounts would allow the project team ‘to focus on the delivery of best value, rather than being distracted by conflict and disputes arising from poor payment practices.’
During the conference, Barclays Bank announced the launch of a project bank account that meets the requirements of the legal system in Scotland.
