Three high street banks have achieved special recognition as part of a Welsh Government scheme to protect payments to SMEs on large-scale public sector construction projects.
Barclays, NatWest and Lloyds have all been declared Nominated Service Providers, after meeting new criteria for the Project Bank Accounts (PBA) initiative.
PBAs are ring-fenced bank accounts which ensure supply chain construction businesses involved in public sector schemes receive payment in five days or less. This helps ease cash flow when traditional payment timescales for subcontractors not using PBA’s can be up to 90 days. PBAs also protect payments against insolvency.
SMEs using the three accredited banks can be confident they will receive a high level of support when setting up PBAs.
The Cabinet Secretary for Finance and Welsh Language, Mark Drakeford, said: “Project Bank Accounts offer strong support to our construction industry. By ensuring SMEs receive payments within five days, we’re providing cash flow protection that helps these businesses thrive.
“Having three major banks now accredited as Nominated Service Providers strengthens this initiative, giving SMEs the confidence and support they need.”
PBAs are a condition of funding on all in scope Welsh Government construction projects and are encouraged as best practice for the wider public sector.
The Cabinet Secretary for Economy, Energy and Planning, Rebecca Evans, said: “Construction-based SMEs in Wales have told us that long waits and chasing late payments burdens their businesses and prevents them from expanding and securing new contracts.
“We have worked with the banking sector to address this issue and I am delighted Barclays, NatWest and Lloyds are the first three banks to meet the new criteria of this scheme.”