Building Magazine Issue 5, 2008
Last year the Office of Government Commerce launched its Guide to Best Fair Payment Practices. It came into force on 1 January this year and applies to all public sector works contracts.
Procurers and members of the delivery team will have to sign a Fair Payment Charter. Over the next four pages, we look at what the guide and charter say, and whether they spell the end to bad payment practices
Much of the fair payment guidance, which was endorsed by the Public Sector Construction Clients’ Forum and bodies representing the construction industry, is devoted to project bank accounts. You can read more about these in the columns by Ann Minogue and Tony Bingham. The guide indicates that the taxpaper would save at least £750m if project bank accounts and fair payment practices were applied.
Although the guidance is directed at the public sector, private sector clients will be encouraged to adopt it too. Barclays Bank and Bank of Scotland have produced standard documentation for setting up project bank accounts and Rider Levett Bucknall, the construction consultant, has produced project bank accounts training packages for clients and the supply chain.
Clients are requested to monitor compliance with the guidance (including their own compliance). The OGC is also monitoring compliance with the charter and the take-up of project bank accounts. It will report on progress in January 2010.