PAFM & Building Services

SELECT Demands Lower Threshold on PBA

The largest trade association in Scotland, SELECT, demands lower threshold on Project Bank Accounts in the wake of the Carillion collapse. The disaster that rocked the construction industry has led to renewed calls for increased regulation regarding payment security from SELECT.

The Scottish association is not the only one voicing its opinion. Others, such as the Specialist Engineering Contractors (SEC) Group, are also calling for the dropping of the threshold at which Project Bank Accounts (PBAs) become mandatory and for PBAs to be universally required.

“The crisis which has surrounded the construction industry since the collapse of Carillion illustrates perfectly why payment protection is required,” mentioned Newell McGuiness, Managing Director of SELECT. “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,” he added.

All Scottish Government bodies are required to include a PBA for all building projects that are over £4.1 million. A PBA is a retained account earmarked for the payment of contractors and ring fenced from spending. However, what SELECT and SEC would like to see is a lowering in the threshold of applicability to projects valued at £2 million.

Newell explained that the advantages of having a PBA in place are that it “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”.

SELECT is the largest trade association in Scotland, with 1,250 member companies that account for around 90% of all electrical installation work carried out in Scotland. Its collective turnover is around £1 billion and it provides employment for 15,000 people.

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