MS, Minister for Culture,
Skills and Social Partnership: Today, the Welsh Government is
launching a consultation on clauses to be included in
construction contracts above £2 million.
The public bodies listed in the Social Partnership and Public
Procurement (Wales) Act 2023 will be required to either include
clauses in their construction contracts and ensure these are
implemented and passed through supply chains, or notify Welsh
Ministers explaining why they have not done so.
The clauses will require project money to be held in Project Bank
Accounts (PBAs). These accounts are trust-protected and speed up
supply chain payments to around 3-5 days instead of weeks. PBAs
also help protect funds if a main contractor becomes insolvent.
Retentions, or money held in reserve to address defects, must
also be secured in ring-fenced accounts.
These new clauses will benefit smaller contractors in particular
who would otherwise often face funding and cash flow problems due
to late payments and insolvencies.
The clauses will also require plans to boost employment and
training opportunities, ensure compliance with employment law,
create more sub-contracting opportunities for SMEs, and support
environmental protection.
If you are involved in public construction contracts, as a
client, contractor or sub-contractor, I encourage you to respond
to the consultation and to prepare for these new requirements
coming into force early next year.
