The wave of uncertainty which rocked the construction industry in the wake of the collapse of industry giant Carillion has led to renewed calls for increased regulation regarding payment security from SELECT.
SELECT, has added its voice to many others – including the Specialist Engineering Contractors (SEC) Group – which are calling for a lowering of the threshold at which Project Bank Accounts (PBAs) become mandatory and for PBAs to be universally required.
Newell McGuiness, Managing Director of SELECT, said: “The crisis which has surrounded the construction industry since the collapse of Carillion illustrates perfectly why payment protection is required”.
The Scottish Government had the foresight to introduce Project Bank Accounts 2 years ago and now is the time for them to reinforce that foresight with a proactive, forward-looking legislative agenda and to provide a safety net for the SMEs which are building Scotland’s future infrastructure.”
Presently, all Scottish Government bodies must include a PBA – which is a retained account earmarked for payment of contractors and ring fenced from spending – for all building projects over £4.1million.
Bodies such as SELECT and the SEC Group, however, wish to see the Scottish Government lower the threshold of applicability to projects valued at £2 million.
Mr. McGuiness said: “Having a PBA in place would provide peace of mind, not just for our members, but for all of Scotland’s SMEs, who work in the construction industry in Scotland. This legislation could arrest the ‘domino effect’ that can devastate an industry in the event of another collapse like Carillion”.