SEC survey champions project bank accounts

An overwhelming 67% of respondents to the Specialist Engineering Contractors' (SEC) Group's research on project bank accounts anticipated that the practice would reduce their costs.

The research, carried out by the SEC Group and audited by Davis Langdon, found that 77% of those firms believed that the move would reduce their costs by up to 5%, while 15% said that their costs would go down by as much as 10%. SEC Group president, Lord O'Neill of Clackmannan, stated that the findings reinforce the decision of the Public Sector Construction Clients' Forum to back the use of project bank accounts. "These figures show that current payment arrangements in the industry, which lend themselves to abuse and manipulation, are adding unnecessarily to the industry's costs," he said.

The SEC Group has made the findings of its research available to the Office of Government Commerce, which is currently drawing up guidance to help public sector clients to draw up project bank accounts.

Project bank accounts were recommended by the National Audit Office in its 2005 report, Improving public sector services through better construction, and in the Construction Commitments charter published by the Strategic Forum for Construction for projects undertaken in connection with the 2012 Olympics.

Lord Clackmannan continued: "When companies seek to boost their own margins by unfairly holding on to cash, this not only increases the overheads of firms downstream, it also damages the trust that is essential if we are to move forward towards a more integrated and collaborative industry."

Trevor Hursthouse, SEC Group chairman, said: "The industry could deliver best value, and so enhance its profitability, if companies improved service rather than relying on their ability to manage cash follow at the expense of others in the supply chain."

• The Construction Confederation and SEC Group have signed a statement of intent to work together to improve health and safety on site, in the run-up to the introduction of the Construction (design and Management) Regulation 2007.

The two bodies will work together to implement priority health and safety initiatives and to secure the adoption, by contractors and clients, of core criteria for the assessment of contractor competence. Specific joint initiatives will target slips, trips and falls on site and practical support for the HSE's Occupational health risk management model. Hursthouse said: "I believe that the spirit of cooperation between our two organisations will support the approach taken by the new look CDM regulations and help us to further reduce accidents and ill-health in the sector."