Holyrood agrees quick payment for contractors

MSPs are gravely concerned about the crisis-hit housing association. Picture: Kenny Smith
MSPs are gravely concerned about the crisis-hit housing association. Picture: Kenny Smith
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SMALL construction firms have welcomed Scottish Government plans to speed up payments to contractors on public sector development projects.

Deputy First Minister Nicola Sturgeon said the government will launch project bank accounts on a trial basis, which would see money paid directly to all members of the supply chain at the same time and not just to the main contractor.

The Federation of Small Businesses (FSB), which had lobbied for the move, welcomed Sturgeon’s announcement at yesterday’s procurement debate in parliament.

Andy Willox, Scottish policy convenor, said: “Small sub-contractors working on publicly-funded projects deserve to get paid as quickly as the primary contractor. For too long, big contractors have used small construction companies as a free source of credit.

“Earlier this year, the FSB wrote to the Scottish Government and encouraged them to explore whether project bank accounts, used elsewhere in the UK, could be adopted in Scotland. We’re pleased to see that they have listened to the FSB’s suggestion and are set to roll-out this innovation in Scotland.”

The trial is a recommendation of the Review of Procurement in Construction, which is set to report in the summer. It is expected the system will be in place later this year.