The Scottish Government has announced a reduction
in the thresholds for mandatory use of project bank accounts
(‘PBAs’) on public works projects, a welcome step in
trying to ensure fairer payments practices within the construction
industry.
From March 2019 onwards, the Scottish Government require public
bodies to make use of project bank accounts for any public works
contracts that are valued at or above £2m previously the
threshold was £4.1 million. Where the relevant construction
works are civil engineering works, the threshold is now £5m
and above reduction from £10m and above.
The reduction of the thresholds is a change to the Scottish
Government policy introduced in 2016. It can be seen as a further
step by the Scottish Government to try improve payment practices in
the construction industry, an industry renown for poor payment
practices. By reducing the thresholds, several more significant
public works contracts will now have to use PBAs.
