I’ve been asked to set up a Project Bank Account for my job. What does that mean?
Historically, the construction industry has a poor reputation when it comes to payment, with concerns raised about the amount paid, the withholding of retention, and the timing of payment. This can have serious consequences in terms of cashflow and can lead to insolvency in the supply chain.
The Government has made a few attempts at resolving the situation, most notably with the Housing Grants Construction and Regeneration Act 1996 (as amended) which introduced statutory payment times and outlawed “pay when paid” clauses in subcontracts.
Questions remain, however, as to how effective the payment regime is. Many smaller organisations are forced to spend disproportionate amounts of resource in financing their operations and chasing payment for work carried out.
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