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Written Statement - Project Bank Accounts Update

Jane Hutt, Minister for Finance

I am pleased to announce the publication of the Welsh Government’s Procurement Advice Note and Guidance on Project Bank Accounts.

In January I issued a Written Statement to announce that pilot projects had been identified to implement Project Bank Accounts (PBAs). I am pleased that further progress has now been made to move this initiative forward.

The construction sector in Wales is largely dominated by small to medium enterprises (SMEs), many of whom play critical roles through the supply chain in delivering our public sector construction contracts. These small businesses are fundamental to the economic well-being of Wales and I am determined that public procurement policy is used to help encourage responsible business behaviour.

Access to finance and cash flow are vital to smaller sub-contractors and it is only fair that they receive prompt payment in accordance with contract performance for helping deliver the construction and infrastructure projects that are key to Wales’ economy.
The introduction of PBAs will help ensure sub-contractors involved in delivery of public construction projects are paid on time. This is a vital development that will help improve cash flow for many of our smaller contractors and improve supply-chain collaboration.

The use of PBAs in construction contracts is a commitment of the Construction Procurement Strategy that I endorsed in July 2013. This also supports the Wales Procurement Policy Statement that I issued in December 2012 which requires public bodies to adopt best practice approaches to payment through the supply chain. 

In my previous Written Statement in January, I announced that Flintshire, Swansea and Torfaen Councils had identified projects to pilot the use of PBAs in Wales. These pilots will prove invaluable in providing an evidence base in order to inform future updates to the Welsh Government policy and guidance and a Lessons Learned report will be produced in due course.

I thank the Specialist Engineering Contractors’ (SEC) Group in Wales for their support in raising the awareness of the challenges that many sub-contractors face in securing payment. Their commitment to this issue has been one of the drivers to the publication of the policy and guidance on PBA implementation.

This is another example of my commitment to using public procurement policy to enable smaller businesses to prosper through delivery of contracts in Wales.  

The Procurement Advice Note and guidance can be found on the Procurement Route Planner link below. 
http://prp.wales.gov.uk

This statement is being issued during recess in order to keep members informed. Should members wish me to make a further statement or to answer questions on this when the Assembly returns I would be happy to do so.