Banks launch project bank accounts

Construction News reported that two of the country's biggest banks have launched project bank account products aimed at the construction industry.

Barclays and Bank of Scotland have both unveiled accounts that will hold all the money on a scheme to be paid to the main contractor and all subcontractors over the course of a project.

The client, main contractor and subcontractors agree a price and a finish time for each section of the works. When the work is completed, the money is paid out automatically by the bank.

In its promotional literature, Bank of Scotland says: "Funds paid by the client are held in trust to ensure that the whole supply chain of contractors and subcontractors are paid fairly and on time."

Such accounts, which guarantee 30-day payment for subcontractors, are being recommended to all Government departments by the Office of Government Commerce as part of the fair payment charter it launched this month.

The banks' products will be officially launched at the end of April in the House of Commons.

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Sourced from Construction News