At the beginning of the year I was a speaker at a seminar on project bank accounts (PBAs) organised by SEWSCAP, the largest-value public sector framework in Wales. The Welsh government (like both the Scottish government and the Northern Ireland executive) has mandated the use of PBAs for projects over £2m.

I was struck by the enthusiasm for PBAs shown by both the speakers and the audience. A speaker from contractor Morgan Sindall was adamant that the cost and administration involved in using PBAs was minimal, adding that they help improve the performance of the supply chain. Another, from Vale of Glamorgan council, was equally supportive: “We were surprised to find the processes involved were very straightforward and have assisted with streamlining our overall payment process.”

PBAs are mandated for UK government projects unless there are “compelling reasons” not to use them. Unfortunately there has been little attempt to collate the “compelling reasons”, let alone challenge them. Nevertheless, Highways England has led the way with £20bn worth of work having been paid for through PBAs by the end of this year. Currently the Environment Agency has almost 120 projects that are using PBAs. The latest major public sector client to announce its intention to use PBAs is HS2.

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