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Mark Drakeford, Cabinet Secretary for Finance

First published:
6 December 2017
Last updated:

This was published under the 2016 to 2021 administration of the Welsh Government

The Welsh Government today launches a new project bank accounts policy to support ethical business practices in government-funded construction, infrastructure and service contracts.

The new policy is being supported by a revised and updated procurement advice note and guidance, which are being published today.

The bank accounts policy strengthens our approach to promoting ethical business practices, making Wales a good place to work and do business while also helping small and medium-sized enterprises (SMEs) in our supply chains to flourish.

Many of Wales’ 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, none more so than smaller businesses with limited resources. It is essential that public sector clients ensure fair and prompt payment, not only to tier one contractors but throughout their supply chains when delivering public contracts.

Project bank accounts provide a mechanism to meet statutory requirements and facilitate fair and prompt payment, streamlining the process for clients, contractors and sub-contractors. Project bank accounts were developed to address poor payment practices in the construction industry but they can be applied to any contract, which relies on sub-contractors.

In launching this new policy, the Welsh Government will lead by example. From 1 January 2018, project bank accounts will be used, unless there is a compelling reason not to do so, on all conventionally-funded construction and infrastructure contracts and service contracts fully or part-funded by the Welsh Government with a value of £2m or more, which are delivered by the Welsh Government.

By including service contracts the scope of our policy goes beyond that of any other UK administration.

All Welsh public sector bodies are also being reminded of the requirement, under principle 6 of the Wales Procurement Policy Statement, to “use project bank accounts where appropriate” and are being encouraged to use the revised and updated project bank account procurement advice note and implementation guidance.

I would like to thank the Specialist Engineering Contractors’ (SEC) Group in Wales for their support in raising awareness of the challenges that many sub-contractors in the construction industry face in securing payment. Their commitment to this issue has been one of the drivers in the publication of the policy and guidance on project bank accounts implementation.

Today’s announcement is another example of the Welsh Government’s commitment to using public procurement policy to deliver fairness and to enable smaller businesses to prosper through delivery of contracts in Wales.

The procurement advice note (external link) and guidance (external link) are available from the Procurement Route Planner.