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Sat May 25 2024

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HS2 endorses project bank accounts

23 Jul 20 Subcontractor organisations have welcomed approval from HS2 Ltd for the use of project bank accounts on the project.

HS2 Ltd has endorsed the use of project bank accounts (PBAs) across key contracts on Phase One to help protect and ease the flow of payments through the supply chain.

Following a trial of PBAs on two enabling works contracts, HS2 Ltd is now working with its construction contractors to implement these across other contracts.

The move follows HS2’s announcement in May that it was implementing faster payments at all levels of the supply chain in response to the Covid-19 pandemic.

Rail systems procurement director Andy Cross said: “I am thrilled that we have taken this crucial step to further strengthen our fair payment policies and in so doing, support companies at all levels of the supply chain through the use of PBAs. HS2 will play a critical role in the recovery of the UK’s economy as we emerge from the pandemic, supporting and creating jobs across the construction industry. This announcement means that companies, big or small, working with us will feel confident and supported as we work together to build Britain’s new low carbon high speed railway.”

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Rudi Klein, chief executive of the Specialist Engineering Contractors (SEC) Group, said: “As the lead campaigner for using PBAs, SEC Group applauds the decision of HS2 to use them (alongside other measures such as the abolition of retentions). In recent years we have having a dialogue with HS2 on promoting improved payment security for HS2 supply chains. Implementing PBAs now will be a massive boost to construction SMEs struggling to make ends meet as we emerge from the current crisis. HS2 will also benefit since PBAs will encourage more collaborative working and help reduce construction costs. Given HS2’s decision there’s no longer any excuse for contracting authorities not to use PBAs.”

Federation of Small Businesses chairman Mike Cherry said: “HS2 is a major, multi-million-pound government project and it’s absolutely crucial that small businesses have the chance to win work and build it.  Today’s announcement is an important moment to involve UK small businesses in such a flagship public procurement programme.

 “We have called for the adoption of project bank accounts in major projects as it brings confidence to small firms to bid for work.  For many small businesses, the fear of being part of a project where late payments leave them out of pocket is a very real, very harsh reality. PBAs allow them to get involved safe in the knowledge that no matter what happens, they will be paid – and paid on time. It’s good to see HS2 leading by example. We hope to see other major projects following suit.”

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