The Specialist Engineering Contractors (SEC) Group representing a sector comprising over 60,000 companies in the UK construction industry has welcomed reports that Crossrail will be using project bank accounts on all its major contracts.
This means that payments for firms in the supply chain delivering Crossrails projects will be paid directly out of a ring-fenced bank account. Trevor Hursthouse, Chairman of the SEC Group welcomed the news:"This is an historic step.
It will dramatically change construction industry payment practices with the result that cash flow to the supply chain, especially to SMEs, will be assured".The Office of Government Commerce has estimated that the use of fair payment practices such as project bank accounts will reduce the cost of construction projects by as much as 2½%.
This will represent significant savings to Crossrail as well as reducing the risk of insolvencies which invariably cause disruption to projects. Trevor Hursthouse added:"Crossrail has now set an example for all public sector to clients to follow.
We hope to see project bank accounts used as standard on all public sector projects. This will also help deliver the Chancellor of Exchequers Budget commitment to discharge payment within 5 days especially along the supply chain".