Changes Made To Construction Payments

Scotland's construction industry is to benefit from a new initiative that will speed up payments to contractors in public sector developments.

Ring-fenced bank accounts will be used to speed up available funds to all contractors.

Under the plans, a client will be able to make payments directly and simultaneously to the main contractor and members of the supply chain.

Deputy First Minister Nicola Sturgeon revealed the Scottish Government was to trial the scheme during a procurement debate.

The announcement follows a review of Procurement in Construction, which is set to report in the summer on how Scotland's £2bn public construction contracts are awarded.


The system aims to be in place later this year and will speed up available funds to all contractors with electronic payments typically taking five days.

According to ministers, project bank accounts will reduce the time between initial expenditure on labour, plant and materials and subsequent payment, which in turn, will help reduce insolvencies, particularly among small and medium businesses.

Ms Sturgeon said: "The Scottish Government is working tirelessly to improve on the procurement system in Scotland's public sector in order to maximise economic growth and support jobs.

"We are happy to take on board the trial of project bank accounts for public sector projects and we are now looking to identify suitable opportunities which will support local and national economies and boost cash flow for both contractors and subcontractors."

(JP/CD)