The government has said it is exceeding its targets in the roll out of project banks accounts after paying for £1.4 billion of work in six months through the initiative.
The Cabinet Office said it is on track to exceed a £2bn target for construction PBAs in 2012/13, after paying £1.4 billion in the half-year.
PBAs are ringfenced electronic bank accounts, from which payments are made directly and simultaneously by a client to its supply chain.
In 2011/12 the target was £0.5bn, and government reported £1.1bn. So far in 2012/13 it says it has hit £1.4bn of the £2bn full year target.
It aims to deliver £4bn worth of construction projects using the accounts by the end of 2014.
Cabinet Office Minister Chloë Smith said: “In construction, as in any other industry, timely cash flow is critical to the survival of many contractors in the supply chain, particularly SMEs and micro businesses.
“I know it’s a real problem for companies, in particular smaller businesses, when they have to waste time and run around chasing payments for projects they’re working on.
“That’s why I’m glad to confirm that half-year figures show we’re on track to exceed this year’s target and have already paid £1.4 billion of projects through Project Bank Accounts, ensuring all contractors are being paid on time.”
McCann & Co is based in Nottingham and provides street lighting and traffic signs:
“We are currently working on the M62 Junction 25 to 30 Managed Motorway for BMJV (Bam Nuttall – Morgan Sindal Joint Venture). Payments for this project are paid via a Project Bank Account and our experience is that payments have been excellent. No payments have been received beyond the due date and in some cases several days early.
“This has enabled us to more accurately predict our cash-flow position and released funds for other projects. We are keen to extend this to our supply chain and thereby further reduce our internal administration costs. We hope to achieve this on any subsequent projects.”