The Review of Scottish Public Sector Procurement in Construction noted that late payment of subcontractors by main contractors was a particularly corrosive behaviour, and recommended that Scottish Government should trial Project Bank Accounts (PBAs). A PBA allows sub-contractors to receive money which is due to them in days rather than potentially wait weeks or months for the main contractor to pay. Also, the trust deed that underpins a PBA protects funds from being counted as part of an insolvent main contractor’s estate. In other words, a PBA “ring fences” money due to sub-contractors.
Scottish Procurement and Commercial Directorate (SPCD) is co-ordinating the pilot programme and working with a range of public bodies including Health Facilities Scotland (HFS) under Frameworks Scotland 2 to trial PBAs. SPCD is developing PBA processes under the Banking Services Framework Agreement and has implemented a Lessons Learned Programme to gather feedback from stakeholders. A Policy Leads’ Forum has also been established for public sector practitioners, including HFS, to discuss a range of matters such as PBA policy, procedures and guidance with Scottish Government.
The Review implementation process allows for completion of PBA trials in June 2016. However it is possible that the pilot projects and other work will be able to facilitate the consideration of next steps, including possible roll-out, before then. In the meantime SPCD has placed information on PBAs and related activities on the PBA website. While it should be noted that no decision has yet been taken on whether or not PBAs should be rolled out, preparatory work is ongoing to build standard, consistent and repeatable processes, including the development of practical guidance, etc.
If you would like to contact SPCD about Project Bank Accounts email: ProjectBankAccount@Scotland.gsi.gov.uk or contact Stuart Brown who represents HFS on the Policy Lead’s Forum at stuart.brown1@nhs.net
