Welsh Procurement Policy Note (WPPN) 011: Project Bank Accounts Policy – Advice for Devolved Welsh Authorities

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• A prosperous Wales
• A resilient Wales
• A more equal Wales

• This Welsh Procurement Policy Note (WPPN) is effective from the date of commencement of the Procurement Act 2023 and the Procurement (Wales) Regulations 2024. For procurements started prior to this date (24th February 2025), please refer to WPPN 03/21.
• Any policy should be read in conjunction with the Wales Procurement Policy Statement, the Procurement Act 2023, the Procurement (Wales) Regulations 2024 and the Social Partnership & Public Procurement (Wales) Act 2023.
• It should not be treated as legal advice and is not intended to be exhaustive – contracting parties should seek their own independent advice as appropriate. Please also note that the law is subject to constant change and advice should be sought in individual cases.
• The note assumes a certain level of knowledge of public procurement. It is available via the Welsh Government website and any queries should be directed to CommercialPolicy@gov.wales or via the Welsh Governments’ customer services.
• References to the ‘Procurement Act 2023 and the Procurement (Wales) Regulations 2024’ will be expressed herein as “the Procurement Regime”.

This Welsh Procurement Policy Note (WPPN) encourages the use of Project Bank Accounts (PBAs) as a means of facilitating prompt payment and insolvency protection measures in public sector supply chains.

Use of PBAs supports the Wellbeing of Future Generations (Wales) Act 2015 wellbeing goals of ‘A Prosperous Wales’, ‘A Resilient Wales’ and ‘A More Equal Wales’ in their positive impact on the economy and mental wellbeing by ensuring prompt and fair payment terms that relieve cash flow pressures, particularly on SMEs.

This WPPN sets out advise for Devolved Welsh Authorities (DWA) on implementing Welsh Government PBA policy. WPPN 010 sets out full details of what PBAs are and guidelines for contractors on how to set up a PBA.

Project Bank Accounts (PBAs) are a condition of funding on all Welsh Government construction and infrastructure projects and any other contracts deemed appropriate by contracting authorities, which are fully, part or Grant funded by Welsh Government. PBAs are also promoted as best practice on fair payment to the wider public sector.

A further update to this WPPN will follow in early 2026 to align with the Social Partnership and Public Procurement (Wales) Act 2023.

PBAs are ring-fenced bank accounts with trust status that act as a mechanism for making payments. PBAs replace the traditional multi-layered payment terms between tiers in the supply chain with simultaneous payments to the lead contractor and supply chain partners. Traditional payment methods have resulted in sub-contractors commonly having to manage 60-90 day payment terms. Payments via a PBA typically take between 3-5 days from the deposit of money into the account following certification of the payment schedule.

SMEs play critical roles in the delivery of public sector projects through sub-contracting arrangements. Access to finance and cash flow are vital to any business and no more so than smaller businesses with limited resources. PBAs alleviate the time and cost burden of sub-contractors having to chase late payments and dispute resolution proceedings by ensuring timeliness and certainty of payment. Paying local supply chains on time helps these businesses to grow and maintain their business, which in turn supports the local economy with stable jobs and future opportunities for employment.

PBAs also have the added benefit of protecting payments in the event of main contractor insolvency. This mean that in the event of supply chain collapse, sub-contractors who are part of a PBA will still get paid.

Welsh Government is committed to using procurement as a lever for driving economic, social and environmental benefits whilst supporting jobs and growth. Public procurement should help promote Wales as a good place for doing business and should provide mechanisms that allow suppliers of all sizes to flourish. PBAs are a mechanism that supports this ethos.

It is important that the DWA ensures the benefits of PBAs are understood and are communicated to prospective tenderers and down the supply chain.

5.1 Procurement Act 2023

Under the Procurement Act 2023 there are implied payments terms in public contracts, which also applies to sub-contracts and regulated below-threshold contracts, where any sum to be paid under a public or regulated below-threshold contract by a DWA must be paid within 30 days. DWAs should also be aware that there are some exceptions to this implied term (see sections 68, 73 and 88 of the Procurement Regime. DWAs should consider whether a PBA could be used in the contract to help achieve this 30-day payment term, since the intention of a PBA is to help ensure prompt payment not just to main contractors, but down the supply chain. PBAs may also safeguard DWAs from legal action under the Late Payment of Commercial Debts (Interest) Act 1998 that allows businesses of any size to claim statutory interest on late payment of undisputed invoices within 30 days.

5.2 Social Partnership and Public Procurement (Wales) Act 2023

Prompt payment is a focus of the socially responsible procurement duties under part 3 of the Social Partnership and Public Procurement (Wales) Act 2023 (SPPP Act). The Act makes specific reference to prompt payment in the context of supply chains for construction contracts over £2 million, requiring public bodies to inform Welsh Ministers if they do not intend to include a set of clauses, which include clauses requiring the use of PBAs. Coming into force in 2026, the Act will significantly strengthen the need to use PBAs in Wales requiring contracting authorities who do not to include these clauses to notify Welsh Ministers. Summaries of these notifications and ministers’ responses must be published, and ministers may instruct a public body to include the clauses.   

This WPPN will be updated early 2026 to align with the SPPP legislation.

There are 2 different types of PBAs, a Sole Account and a Joint Account. The DWA should choose which type of account it would like the PBA to be set up as.

6.1 Sole Account

Under a Sole Account the DWA or main contractor applies to open the account and sign a Trust Deed to establish itself as the sole trustee. The sole trustee administers the account and is solely responsible for instructing the bank to make payments as per the agreed schedule of payments on the due date. If set up by the main contractor, then copies of PBA statements and ‘read only’ access to the online account must be provided to the DWA to ensure payments can be monitored and match the agreed schedule.

6.2 Joint Account

Under a Joint Account both the DWA and the main contractor sign a Trust Deed to establish themselves as joint trustees and apply to open the account in both names. As a joint account, both parties will have access to log into and administer the account. Instructing the bank to pay can be done by either party depending on how it is agreed the account will be administered. 

Whilst both approaches ensure prompt payments, the joint account offers the best possible protection of payments. This approach allows the DWA to authorise payments, which eliminates the risk of irregular activity from the main contractor. DWA are encouraged to use this approach to fully protect supply chains.

Welsh Governments PBA policy is applicable to all construction and infrastructure projects which are fully, part or grant funded by Welsh Government.

A PBA is not applicable to a Welsh Government funded construction and infrastructure project if any of the three exemptions apply:

• Exemption 1 - Projects valued at less than £2 million
• Exemption 2 - Projects are shorter than 6 months in duration
• Exemption 3 - Where a main contractor gives a firm undertaking to self-deliver over 75% of the contract.

8.1 Pre-procurement actions

• Determine whether a PBA is required or appropriate on this project
• Identify the processes required to meet your internal governance requirements:
  • Sole or Joint account?
  • Who will sign the PBA documentation and how?
  • Who will agree payments due to the main contractor and each of their named suppliers?
  • Who will be responsible for paying money into the PBA?
• Ensure PBAs are well communicated with internal stakeholders and potential bidders:
  • Include information in any relevant procurement about the requirement to use PBAs.
  • Prepare a briefing pack for the lead contractor and extended supply chain for use in the procurement process. This could include the PBA Digital Flyer.
• Assess the readiness of your organisation. Areas to consider include:
  • Changes to standard procurement and contract documents to reference PBAs e.g., checklists, Terms & Conditions.
  • Training requirements.

8.2 Procurement process actions

You should communicate your intention to manage supply chain payment terms within the Tender Notice, by stating that:

1. A PBA will operate on the project
2. Whether the PBA will be set up and administered on a joint basis or whether the account will be managed by the main contractor on a sole account basis.
3. Payment for suppliers outside the Project Bank Account must not exceed 30 days to comply with the requirements of the Late Payment of Commercial Debts (Interest) Act 1998 (as amended by the Late Payment of Commercial Debt Regulations 2002 (SI 1674) and the Late Payment of Commercial Debt Regulations 2013).

8.3 Tender documentation

At the tender stage include clauses in your ITT documents referencing the use of PBAs and include specific requirements on how the PBA will operate.

1. Example wording for Tender Notice advert
   “A Project Bank Account will operate on this project / framework and is required to adhere to the Minimum requirements for a PBA product at Annex 1 of Welsh Government’s guidance, ‘WPPN 011: Advice for Devolved Welsh Authorities.’ Payment for suppliers outside the Project Bank Account must not exceed 30 days from submission of a valid invoice.”
2. Open Procedure
   If you are using the Open Procedure, you should ensure that PBAs are appropriately referenced in the contract specification and that the initial minimum requirement questions at the start of the tender includes the Question Text as a ‘Yes / No’ - Pass / Fail.
3. Competitive Flexible Procedure
   If you are using the Competitive Flexible Procedure, you should ensure that PBAs are appropriately referenced in the contract specification and at the supplier selection stage include the following question as a ‘Yes / No’ - Pass / Fail.

Use the following question at the supplier selection stage to determine if potential main contractors are willing to use PBAs as a mechanism to ensure fair and prompt payment in line with Welsh Government policy.; You should make this a pass/fail issue, i.e., answering ‘no’ will exclude the prospective tenderer from the process.

• Question text: If you are a main contractor, the buyer requires, under the contract, that you use a Project Bank Account as the primary method of payment to some or all your sub-contractors. Are you willing to comply with this requirement?
• Answer: Yes / No
• Supplier Guidance: The buyer will only select you to tender if you agree to the use of Project Bank Accounts as the sole method of payment to sub-contractors during the stipulated contractual period. For more information on Project Bank Accounts, please see Procurement policy notes.

4. Standard Documents
   You should include standard clauses in your ITT documents setting out the requirements of a PBA, along with copies of the documentation which the successful contractor will need to complete once the contract is awarded.If the bank is known when the ITT is issued, you can include the following documents:
   • 1. Application to Open a Project Bank Account Form
   • 2. Trust Deed
   • 3. Joining Deed
   • 4. Bank Mandate

It is important to engage with a bank at the earliest opportunity but if the bank is not known when the ITT is issued, you need only attach the Trust Deed. As outlined in section 2, it is important that you stay involved in the selection of the bank to ensure compliance with the UK government’s Cabinet Office minimum requirements for a PBA product. This confirmation may be directly from the bank or via sight of the bank’s confirmation to the main contractor before the account is used for the first time.

8.4 Clauses & Standard forms of contract

Most modern construction forms of contract have provisions for the use of PBAs, including NEC (NEC3 Z or Y clauses), JCT and PPC2000. As these forms of contract are subject to regular updates, you should check the current versions.

For any other forms of contract used that may not have PBA clauses already prepared, simple enabling provisions need to be introduced. As a minimum, these should:

• State that due payments are to be routed through the PBA
• Provide the details of how the PBA will operate
• Provide that payments into the PBA qualify as discharge of payment (up to the amount paid in).

8.5 Frameworks

PBAs can be used with Frameworks. When setting up a framework it should be explicitly stated in the tender documentation that a PBA will be used as the preferred method of payment at call off stage. When calling off from the framework, the normal procedure for setting up a PBA will apply.

8.6 Post Award

The process of opening a PBA should be started as soon as possible after the contract has been awarded and for works projects well in advance of the construction phase to ensure the PBA is ready to be used when construction begins. You should ensure the main contractor reaches out to a bank to start the application process. Barclays, Lloyds and NatWest have been appointed as Nominated Service Providers and can be signposted as the banks which can provide a high level of support when setting up a PBA. Full details of the Nominated Service Providers can be found in WPPN 011 ‘Guidelines for Deploying Welsh Government PBA Policy’.

Each bank will have its own processes, but they will all need some form of account application to be completed which are usually accompanied by signed Trust Deeds. Typically, the Trust Deed will only need to be signed by the main contractor under a Sole Account, however, some banks may require the DWA to sign a Trust Deed or a separate document, as confirmation the project exists. In general, the process of opening a PBA account will require:

• Completion of an Account Application form and acceptance of the banks terms and conditions (T&Cs) for a Project Bank Account - The T&Cs should confirm the account will meet the Minimum requirements for a PBA product (Annex 1).
• Completion of a Bank mandate signed by both DWA and contractor for a Joint Account or just the main contractor for a Sole Account.
• Once in place the Bank or main contractor should be asked to confirm the account meets the Minimum requirements for a PBA product (Annex 1).
• Ensure that the internet banking process is being established - if you are not using your own bank you may need to install software provided by the bank onto specified computers to access third party software to authorise payments for a joint account or to view transactions if sole account.
• The WPS should check that the PBA account balance is £0 after the due date and check that the amounts paid match the agreed payment schedule.

Timescales for opening a PBA will depend upon the bank chosen and whether your organisation and / or the Main contractor has an existing relationship with the bank.

• The Procurement Act 2023
• The Procurement (Wales) Regulations 2024
• Social Partnership & Public Procurement (Wales) Act 2023
• The Well-being of Future Generations (Wales) Act 2015

This WPPN applies to procurements commenced under the Procurement Regime and is therefore effective from the commencement of the Procurement Act 2023 and the Procurement (Wales) Regulations 2024 until it is superseded or cancelled.

Principle 5

We will support Welsh Government policy objectives relating to progressive procurement, such as the Foundational and Circular Economy, through collaborative, place-based (whether national, regional or local) procurement activity which nurtures resilient local supply chains.

WPPN 011 ‘Guidelines for Deploying Welsh Government PBA Policy’ to support implementation of this policy is available via the Welsh Government’s website.

An eLearning module on Project Bank Accounts (PBA) is available via the NHS Wales Shared Service Partnership Learning@Wales portal. This module will be updated in early 2026.

A new PBA digital flyer has been created to showcase PBAs and direct people to the WPPNs. This is a useful resource to share with suppliers to support their understanding of PBAs and direct them to useful guidance.

A Project Bank Account Community of Practice group will be set up Autumn 2025. This group will bring supply chains together to discuss and share experiences of PBAs. If you would like to be part of this group, please contact CommercialPolicy@gov.wales

Enquiries linked to this WPPN should be directed to CommercialPolicy@gov.wales

The Welsh Government's minimum requirements for a Project Bank Account:

1. The account needs to be linked to a Trust Deed so that the money is ring-fenced.
2. The banking service provided should not materially alter the operation of the Trust Deed or the PBA.
   • Bank will need to confirm that any PBA product or service they offer is governed by the Trust Deed, this action is covered by point 5.
3. To be a beneficiary of the PBA, a sub-contractor must complete a Joining Deed to confirm their agreement to be paid via the PBA.
   • Joining Deeds should be separate from the Trust Deed.
4. Dual agreement is to be required before the payment is to be made, i.e. the main contractor or DWA knows that it can only act when both parties have agreed the sums due as set out in the schedule of payments. Once agreed neither party can alter the payment without the agreement of the other party.
5. The bank must be informed and acknowledge that a Trust Deed exists and that operation of the payments are governed by this Deed.
   • Main Contractor to request the Bank acknowledge in writing that the account will operate as a PBA. Key features covered by points 1,9,10, 11 and 12.
6. Transactions must be easily available for the DWA to view from the bank report no more than one day after payment.
   • Main Contractor to ensure the DWA has either access to the account via the on-line banking system (this may be set up as read only access) or that the bank will send or make available an account statement the day after the due date for payments to be made out of the PBA.
7. All of the contractors and sub-contractors signed up to the PBA Trust Deed should be paid at the same time, once authorisation has been given by the Trustee(s), payments are made typically made within 3-5 working days.
8. Payments from the PBA should only be able to be made to the contractor and other named supplier beneficiaries.
   • DWA checks on account statements to ensure only named beneficiaries (the contractor and sub-contractors who have completed Joining Deeds) are paid from the PBA.
9. No cheque facility is to be made available on the account.
10. No overdraft facility is to be available on the account.
11. Confirmation is to be obtained from the PBA bank that monies are held in Trust and that they cannot be used to offset any other contractor/supply chain liabilities.
12. There is an obligation on the Main contractor to inform the DWA and appropriate members of the supply chain and trustees of any changes to the PBA with respect to alteration to any terms and payment authorisations

1.0 The Project Bank Account

1.1 The Account Holder undertakes to open an interest [non-interest bearing] Project Bank Account with the Bank, such account to be opened and held in the name of the Account Holder.

1.2. The Employer undertakes to pay all monies due to the Contractor and/or the Sub-Contractors under the Contract and the Sub-Contracts into the Project Bank Account as and when such monies become due for payment in accordance with the terms of the Contract.

1.3 The Parties agree that any monies paid into the Project Bank Account shall, as from the date on which such monies are paid into the Project Bank Account, be kept separate and distinct and clearly identifiable and shall be held on trust for each of the Contractor and the Sub-Contractors in the amounts owing to them as set out in the schedule of payments agreed by the DWA / employer and contractor. The Contractor and the Sub-Contractors acknowledge that they have no rights and/or interest in the monies held in the Project Bank Account other than as a beneficiary of the monies owing to them.

1.4. If for any reason the total amount of monies deposited by the Employer in the Project Bank Account is less than the total amount of monies which has been authorised by the Account Holder for payment to the Sub-Contractors and the Contractor, the monies held in the Project Bank Account shall be allocated to and held on trust for each of the Sub-Contractors and the Contractor in the same proportions that the monies owed to them forms of the total amount of monies owed at that time to the Sub-Contractors and the Contractor collectively.

1.5. The Employer acknowledges that, as and when monies are paid by it into the Project Bank Account in accordance with the Contract, it will cease to have any further rights and/or interest in such monies.

1.6. The Account Holder accepts that, irrespective of any disputes, which may arise in respect of work performed by the Contractor and/or the Sub-Contractors, the Account Holder may not withdraw any monies from the Bank Account (other than in the case of the Contractor where it may withdraw monies owned by it).

2.0 Operation of the Project Bank Account

2.1. The Account Holder agrees that:

2.1.1. They will sign the Bank Mandate as soon as reasonably practicable following execution of this Deed. 3.1.2. They will operate the Project Bank Account at all times in accordance with the Bank Mandate, the Deed and the Contract. If there is any conflict between the Bank Mandate, the Deed and/or the Contract, the documents shall take precedence in the following order:

• 2.1.2.1. The Deed
• 2.1.2.2. The Bank Mandate, and
• 2.1.2.3. The Contract.

2.1.3. The Project Bank Account shall not become overdrawn; they will keep accurate, complete and up to date books of account and records of all transactions relating to the Project Bank Account, including but not limited to details of all payments out of the Project Bank Account authorised by the Account Holder and any bank charges payable;

2.1.4. They shall ensure that access to the online banking facility is only made available to those of its employees and/or representatives who need access to administer the account and that such employees and/or representatives are aware of the confidential nature of the access details, the Bank Account details and the Bank Account transactions;

2.1.5. They are responsible for the acts and/or omissions of their own employees and/or other representatives as if they were its own acts and/or omissions;

2.1.6. They hold all monies in the Bank Account on trust for the full and exclusive benefit of the Contractor and the Sub-Contractors in accordance with clause 2.3 and 2.4 above.

2.2. As and when payment milestones set out in the Contract have been achieved, they shall identify any payments due under the Contract and the Sub-Contracts and:

2.2.1. The Employer shall promptly pay the monies due under the Contract into the Bank Account;

2.2.2. As and when the monies have cleared, they shall promptly instruct the Bank to make any payments due pursuant to the Contract and/or Sub-Contract to the Sub-Contractors and/or the Contractor from the Bank Account.

2.3. They shall inform each of the Sub-Contractors of the amounts which are to be paid to them from the Bank Account and the date on which the Sub-Contractor can expect to receive such payment on the same day as they instruct the Bank to make payments out of the Bank Account.

2.4. All payments to the Account Holder in respect of its role as Contractor and the Sub-Contractors shall be made by bank transfer. The Sub-Contractors must inform the Account Holder of their relevant bank account details and keep them up to date at all times. The Sub-Contractors accept that failure to do so may result in monies not being paid to them and that the Account Holder has no liability for such failure.

2.5. Any interest paid by the Bank in respect of the monies held in the Bank Account shall belong to the Account Holder and may be withdrawn by it on conclusion of the works under the Contract.

2.6. Any bank charges, money transmission costs and other disbursements incurred in the establishment and operation of the Bank Account shall be borne by the Account Holder.

3.0 New Sub-Contractors

3.1. If the Contractor appoints a new sub-contractor in respect of the Contract after the date of this Deed and agrees with that the new sub-contractor that it shall be paid via the Bank Account, the Account Holder shall arrange for the new sub-contractor to sign a Deed of Adherence / Joining Deed¹ in the form set out in Schedule 1 to this Deed.

3.2. The Parties agree that, in signing the Deed of Adherence / Joining Deed, the Account Holders are signing on behalf of themselves and as agent for each of the Sub-Contractors. Each Sub-Contractor agrees to be bound by the terms of any Deed of Adherence / Joining Deed validly executed by the Account Holders on behalf of all the Parties.

4.0 Removal of Sub-Contractor

4.1. If prior to the expiry of the Term a Sub-Contractor ceases to be involved in the Project for whatever reason (including but not limited to the termination of its Sub-Contract), the Account Holders shall arrange for the payment out of the Bank Account to the Sub-Contractor of any monies held on trust for the benefit of that Sub-Contractor.

4.2. On payment of all the monies due to it from the Bank Account in accordance with clause 4.1 above the Sub-Contractor shall cease to have any further rights and/or interests in the Bank Account.

5.0 Confidentiality

5.1. No party shall use and/or disclose any confidential information, which is acquired by it about another party’s business and/or given to it by another party to this Deed except in the proper performance of the Trust Deed or Contract.

6.0 Termination

This Deed shall continue for the associated Contract Term, subject to early termination in accordance with clause 7.2 below.

6.1. This Deed shall immediately terminate if:

6.2.1. The parties agree in writing that the Deed should terminate; and/or

6.2.2. The Contract terminates and all monies have been paid out from the Project Bank Account.

6.2. On termination of this Deed the Account Holders undertake to ensure all monies held on trust for the benefit of the Contractor and/or the Sub-Contractors and held in the Project Bank Account are promptly paid to the relevant parties (less any outstanding bank charges and expenses).

7.0 General

7.1. This Deed contains the whole agreement between the Parties and it supersedes any prior written or oral agreement between them and is not affected by any other promise, representation, warranty, usage, custom or course of dealing. The parties confirm that they have not entered into this Agreement on the basis of any representation that is not expressly incorporated into this Agreement. Nothing in this Deed shall exclude liability for any fraudulent statement or act made prior to the date of this Deed.

7.2. No waiver by any Party of any breach of this Agreement shall be considered as a waiver of any subsequent breach of the same provision or any other provision.

7.3. The invalidity, illegality or unenforceability of any of the provisions of this Deed shall not affect the validity, legality or enforceability of the remaining provisions of this Deed

7.4. No Party shall be liable for any delay or failure in performing its obligations under this Deed as a result of reasons beyond its reasonable control, including but not limited to acts of God, war, flood, fire, labour disputes, sub-contractor delays, strikes, lock-outs, riots, civil commotion, malicious damage, explosion, governmental actions and any other similar events. Failure to make payment due to insufficient funds in the Bank Account is not a force majeure event.

7.5. The Sub-Contractors are only liable for their own acts and/or omissions under this Deed and not the acts and/or omissions of any of the other Sub-Contractors. The Sub-Contractors are not jointly and severally liable under this Deed.

7.6. No party may assign its interest in this Deed (or any part) without the written consent of the other parties, such consent not to be unreasonably withheld or delayed.

7.7. None of the terms and conditions of this Deed shall be enforceable by any person who is not a party to it.

7.8. This Deed is governed by and interpreted in accordance with English and Welsh law (as it applies in Wales) and the parties agree to submit to the exclusive jurisdiction of the English and Welsh courts.