06 MAR 2019


Leading contractors’ lobby organisation, the Specialist Engineering Contractors’ (SEC) Group, has praised Highways England for its payment strategy which mandates project bank accounts for its supply chain.

Since 2009, Highways England, one of the largest public-sector clients in construction, has championed project bank accounts (PBAs) as their default arrangement for construction projects worth more than a total of £5m. In doing so, not only are they saving tax-payers’ money by generating efficiencies of around 1%, say the SEC, but they have also reduced their average payment cycle to firms in their supply chain to 19 days. They have also over-achieved on their target for procuring from SMEs.

Highways England is a member of the Fair Payment Working Group, which is linked to the government’s Construction Client Board. It accounts for around 75% of all PBAs in operation by value. By 2020 it is estimated that there is likely to have been £20bn+ worth of contracts let using PBAs.

Trevor Hursthouse, chairman of the Specialist Engineering Contractors’ (SEC) Group, applauded Highways England’s achievement. “For over ten years SEC Group has been campaigning to encourage public bodies to use PBAs,” he said. “Highways England has demonstrated that PBAs can make a massive difference in ensuring prompt payment to the supply chain.  

“They have shortened payment cycles on construction projects and provided protection to subcontractors from upstream insolvencies; subcontractors on Carillion projects did not lose out. We are grateful to the leadership and management of Highways England who have demonstrated how a responsible public-sector client can help to stop payment abuse,” Hursthouse said.

There are also benefits for clients from using PBAs. “Project bank accounts are now acknowledged to be the most effective method of ensuring secure and regular cash flow,” says Lloyd Biddell, head of cost intelligence at Highways England. “Using them makes Highways England the client of choice in an increasingly competitive market and ultimately helps us deliver our programme to improve our road network and besides efficiencies, they’re also helping us do the right thing for our suppliers,” Biddell said.


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