A project bank account is a means of paying

sub-contractor A subcontractor is an individual or (in many cases) a business that signs a contract to perform part or all of the obligations of another's contract. Put simply the role of a subcontractor is to execute the job they are hired by the contractor f ...

s in a

construction project Construction is a general term meaning the art and science to form objects, systems, or organizations,"Construction" def. 1.a. 1.b. and 1.c. ''Oxford English Dictionary'' Second Edition on CD-ROM (v. 4.0) Oxford University Press 2009 and come ...

directly from the funds made available by the construction client instead of from the earnings or funds of the

prime contractor A general contractor, main contractor or prime contractor is responsible for the day-to-day oversight of a construction site, management of vendors and trades, and the communication of information to all involved parties throughout the course of ...

. The UK Government promotes the use of project bank accounts (PBAs) in major construction projects. Elizabeth Line construction at Moorgate

UK Government ga, Rialtas a Shoilse gd, Riaghaltas a Mhòrachd , image = HM Government logo.svg , image_size = 220px , image2 = Royal Coat of Arms of the United Kingdom (HM Government).svg , image_size2 = 180px , caption = Royal Arms , date_es ...

guidance describes a PBA as "a ring-fenced bank account from which payments are made directly and simultaneously to a lead contractor and members of the supply chain. Through faster payments, those lower down the supply chain benefit from that cash-flow". John M. Stevens, Director of Dodd Group, an electrical and mechanical services sub-contractor, reflects that "without doubt this has to be the way forward for our industry if the current

payment A payment is the voluntary tender of money or its equivalent or of things of value by one party (such as a person or company) to another in exchange for goods, or services provided by them, or to fulfill a legal obligation. The party making the p ...

culture is to be eradicated". PBAs help eliminate the excuses for late or reduced payment, the burdens on overhead costs and the programme delays as a result of disputes and resultant insolvencies, which often result in

small and medium sized enterprises Small and medium-sized enterprises (SMEs) or small and medium-sized businesses (SMBs) are businesses whose personnel and revenue numbers fall below certain limits. The abbreviation "SME" is used by international organizations such as the World Bank ...

being hardest hit. A UK Government briefing document published in 2012 identified the

Crossrail Crossrail is a railway construction project mainly in central London. Its aim is to provide a high-frequency hybrid commuter rail and rapid transit system crossing the capital from suburbs on the west to east, by connecting two major railway ...

project, the

Highways Agency National Highways, formerly the Highways Agency and later Highways England, is a government-owned company charged with operating, maintaining and improving motorways and major A roads in England. It also sets highways standards used by all fo ...

and the

Ministry of Defence {{unsourced, date=February 2021 A ministry of defence or defense (see spelling differences), also known as a department of defence or defense, is an often-used name for the part of a government responsible for matters of defence, found in states ...

as users of the PBA approach to payments.Cabinet Office
Project Bank Accounts – Briefing document
published 10 February 2012, accessed 2 January 2021

Barclays Bank Barclays () is a British multinational universal bank, headquartered in London, England. Barclays operates as two divisions, Barclays UK and Barclays International, supported by a service company, Barclays Execution Services. Barclays traces ...

and the

Bank of Scotland The Bank of Scotland plc (Scottish Gaelic: ''Banca na h-Alba'') is a commercial and clearing bank based in Scotland and is part of the Lloyds Banking Group, following the Bank of Scotland's implosion in 2008. The bank was established by th ...

were identified as financial institutions supporting use of PBAs. The

Joint Contracts Tribunal The Joint Contracts Tribunal, also known as the JCT, produces standard forms of contract for construction, guidance notes and other standard documentation for use in the construction industry in the United Kingdom. From its establishment in 1931, J ...

(JCT) provides documentation to support the use of a PBA involving the client, prime contractor and sub-contractors. Crossrail refers to its use of PBAs as a feature of its "legacy learning" for future projects whose partners want to implement the process.Crossrail
Fair Payment and Project Bank Accounts
published 9 July 2018, accessed 2 January 2021

References

Payments Construction in the United Kingdom {{Business-stub