The Specialist Engineering Contractors’ Group (SEC Group) has applauded the decision of High Speed 2 (HS2) to implement the use of project bank accounts (PBAs) for payments across existing and future contracts.
HS2 is currently the biggest infrastructure project in the UK and Europe. With thousands of contract opportunities generated this assurance of prompt and secure payment will have a significant impact across the sector not least for SMEs. It is estimated that 10,000 companies will be engaged in total; over 2,000 companies have already delivered work on HS2. 95% of HS2 contracts have gone to UK-based businesses and 60% of those are SMEs.
PBAs enable payments to be made directly to firms in the supply chain without them having to cascade through the different layers of contracting. Payments can be discharged within 15 days and a measure of protection is provided against insolvencies upstream of the supply chain. £20 billion worth of work from Highways England will have been paid through PBAs by the end of this year and the Environment Agency has currently almost 120 projects which are using PBAs.
SEC Group Chairman, Trevor Hursthouse, praised the team at HS2 for taking this progressive step: “For over 10 years SEC Group has been campaigning to encourage public bodies to use PBAs. I’m delighted with HS2’s stance. The HS2 team is passionate about driving a collaborative and transparent approach to procurement and delivery across the whole supply chain. Using project bank accounts will safeguard prompt payment and furthermore guarantee security of payment across the supply chain which is particularly important during these times.”
Andy Cross, Rail Systems Procurement Director, 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.”
HS2 is already supporting around 9,000 jobs. During construction HS2 is expected to create more than 30,000 engineering and construction jobs, including 2,000 apprentices, directly on its sites and many more thousands in the supply chain around the country.