Government to spend £4bn through project bank accounts

The government has pledged to use project bank accounts on up to 20% of government construction projects within three years.

This means at least £4bn of government spending will be paid directly to SMEs working on government building supply chains.

At present the system is used by 12 government clients, including Crossrail and Defence Estates, on £1.8bn worth of projects.

Maude said: “We are leading the way with this innovative approach to paying suppliers, and where better to do so than in an industry where 99% of businesses are SMEs.

“Project bank accounts mean SMEs in the construction industry will be paid faster, freeing them of the burden of juggling with their cash and allowing them to focus on expanding their businesses.”