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The Office of Government Commerce has just published 48 pages of 鈥渇air payment鈥� practices for construction procurement. And before I even began to read it I fell victim to my pre-judgment streak. I heard myself go 鈥渉mfff鈥�. Oh come on, we all have a pre-judgment streak. My dear old dad bought a Vauxhall Viva in 1964. Trouble! And since then I still can鈥檛 look at a Vauxhall badge without my pre-judgment streak screaming 鈥渢rouble鈥�! My hmfff this time was triggered by the words: 鈥淥ffice of Government鈥�.

Let me explain. In 1964 a government office produced the Banwell Report on construction payment practices. Damn good noises in that report. Came to nowt. Me and my fellow streakers quite naturally squirm at all the government endeavours that have gone nowhere. But I will read these 48 pages anyway. Here goes.

Wow! Or as Bart Simpson would say 鈥淓at my shorts鈥�! The construction industry鈥檚 biggest customer is to begin 鈥減roject bank accounts鈥�. This isn鈥檛 just aspirations and bull. Barclays and Bank of Scotland have already got the paperwork in place. Here is the new money payment machine. The client at the top of the heap pays all the interim payment sums due on a, say, monthly certificate into a trust account. Then, all those who are in the supply chain and registered as part of the subcontractor or supplier receive their cash direct from the trust. So does the main contractor.

Credit: Simone Lia

Notice that the published document explains that the cash in the project bank account is in trust. 鈥淭he trust status of the account is essential in order to avoid potential problems if the contractor goes into receivership. The account, in effect, is held in trust on behalf of the whole of the supply chain, in a similar way to how a solicitor operates a client account. This prevents a receiver seizing the proceeds of the account.鈥�

Do you recognise any of that idea? It was a Latham recommendation in July 1994. He recommended that mandatory trust funds for payment be established. For Latham the money was to go into the trusts at the front of each month and come out following the valuation at the end of the month. But it was not put into legislation alongside the payment and adjudication rules. So it fell away.

鈥業ntegrated working鈥�, 鈥榳orking in good faith鈥� 鈥� damn it, it even trots out 鈥榮pirit of mutual trust and respect鈥�. Try trotting all that out on a building site

But now, 2008, the government is going to do all that in its own contracts. My hmfff has changed to Oooh! One thing, though, can the Office of Government Commerce kindly tell yours truly which projects are to implement the idea? And if the answer is none or none yet, well 鈥� we鈥檙e all watching you.

What else is in the fair payment pages? The 鈥渃harter鈥� that鈥檚 what. 鈥淭he charter sets out the values and arrangements relating to payment practices consistent with integrated working.鈥� Oh please, do stop using that sort of language. We don鈥檛 fall for it. It reads like a mission statement: 鈥渢ransparent payment practices鈥�, 鈥渋ntegrated working鈥�, 鈥渨orking in good faith鈥�, damn it, it even trots out 鈥渟pirit of mutual trust and respect鈥�. Try trotting all that out on a building site.

Then the commitments are trumpeted: 鈥淐ompanies have the right to receive correct full payment as and when due鈥�. You might just have well shouted that Tuesday follows Monday. 鈥淯njustifiable withholding of payment is unethical鈥�, 鈥渇air payment will apply equally between client and lead contractor and throughout the supply chain鈥�, 鈥渢he correct payment will represent the work properly carried out in accordance with the contract鈥� 鈥� and it goes on.

The truth is that nobody will pay the slightest attention to all this stuff. But if the charter said anyone who puts in an invoice claiming for work done that they know hasn鈥檛 been done, or if it said anyone who withholds money on grounds they know to be spurious, and if it said anyone who just sits on unpaid bills will all sent to work test-driving Vauxhalls 鈥� now that would be something. The Fair Payment Charter was written by some marketing wizard who doesn鈥檛 know one end of an arris from a half-round. So hmfff! But that project bank account is a very different. Ooooh!