Debbie Abrahams MP has pledged to introduce a ten minute rule bill in Parliament ensuring that public sector projects over £500,000 use project bank accounts.
Abrahams thinks that her bill would stop small and medium-sized (SME) businesses being paid late by large companies, whilst protecting them from losing any money they are owed.
Project bank accounts (PBAs) are ring-fenced bank accounts within a trust arrangement so that, if a tier 1 contractor collapses, as Carillion did in January 2018, subcontractors will still receive money they are owed.
The National Federation of Builders (NFB) admires Abrahams’s hard work towards ensuring that SME subcontractors are treated with respect throughout the supply chain and the public sector needs to take a leading role in stamping out late payment.
Richard Beresford, chief executive of the NFB, said: “The NFB applauds Abrahams’s efforts to make the supply chain a fairer place for SME subcontractors. This bill could be the nudge needed to push contractors away from the business model that has payment delays built in.”