Understanding accountability in construction payments
Why accountability in construction payments always gets lost in translation
When a construction project collapses, everyone reaches for the same defence: “It wasn’t our fault.” The developer points to the bank, the bank points to the contractor, and the contractor points to a spreadsheet that no longer balances.
It’s a familiar blame game, but it hides a deeper problem. The industry has normalised financial structures that make accountability almost impossible to trace. And when nobody owns the money trail, everyone loses.
According to Department for Business and Trade research cited by Construction News, late payments cost the UK nearly £11 billion a year, forcing around 14,000 businesses to close annually, the equivalent of 38 every day.
For an industry where SMEs make up 99% of the supply chain, the consequences of weak accountability and delayed cash flow are systemic.
A system built on mistrust
Construction is one of the few global industries where billion-pound projects are routinely financed through chains of unsecured promises. Developers rely on drawdowns that depend on valuations; contractors front costs long before payment; subcontractors sit at the back of the queue, waiting for cash that may never come.
In theory, contracts define accountability. In practice, those contracts often push risk downward, away from the people with control and toward those least able to absorb it.
When things go wrong, the legal structure says one thing, but commercial reality says another. The project doesn’t fail because of one late payment or one bad actor. It fails because responsibility has been distributed so widely that it’s effectively disappeared.
Understanding where responsibility sits
In theory, every participant has a clear role in keeping projects and payments on track. In practice, those lines blur under pressure. Understanding where each party’s responsibility starts and where it ends is essential if the industry is serious about fixing accountability.
Developer or owner: commissions and funds the project.
Lender or bank: provides construction or development finance, controls drawdowns, and monitors progress.
Main contractor: delivers the works and manages the supply chain.
Consultants and project managers: architects, engineers, and project managers who certify progress and advise funders.
Subcontractors and suppliers: deliver specialist trades and depend on timely payment.
Insurers and sureties: provide bonds and financial guarantees.
Legal counsel and lawyers: structure contracts, allocate risk, draft financing and security documents, and manage dispute resolution when issues arise.
Regulators and authorities: ensure compliance and building safety.
Escrow and project business account providers: ring-fence funds to ensure subcontractor protection and payment integrity.
The missing middle: financial governance
As we can see, every player has their part and, as it stands, conversations between parties currently focus on topics such as design quality, procurement, and programme delivery. But we rarely talk about the design of the finance itself and the needs of individuals as part of that framework.
Who controls the funds? Who monitors release conditions? What happens if a lender pauses a drawdown or a certifier delays approval? These questions rarely make it past the pre-contract meeting, yet they determine who survives when pressure hits. The solution isn’t complicated: ring-fence the money.
Project bank accounts, escrow structures, and payment bonds exist precisely to stop accountability from evaporating. When funds are held securely, with clear conditions and visibility for every tier of the supply chain, projects don’t grind to a halt when something goes wrong.
Escrow doesn’t just protect subcontractors; it protects the integrity of the entire financing ecosystem and safeguards reputations. It replaces the fragile trust that defines construction payments with a transparent, rules-based system.
The legal lens on responsibility
Ask a lawyer who’s responsible, and they’ll say: “It depends on the contract.” Ask anyone on site, and they’ll say: “It depends who has the cash.”
Both are right, and both highlight why accountability so often gets lost. The law defines liability, but the flow of funds defines power. If we want true accountability, the two must align.
That means contracts should not just describe what needs to happen but also how the money will behave. Legal language and financial structure have to talk to each other. Too often, they don’t.
From friction to frameworks
It’s time to build accountability into the system itself. That starts with three mindset shifts:
Transparency over trust: Make payment flows visible, automated, and conditional.
Shared responsibility: Developers, lenders, and contractors must own their part in financial governance. It’s a shared ecosystem, not a hierarchy.
Proactive protection: Escrow, project bank accounts, and surety structures should be standard, not exceptional.
The future of financial accountability
As capital becomes more global and supply chains more complex, accountability can’t be a post-mortem exercise. It has to be built in and understood from day one. The question isn’t who’s to blame when things go wrong; it’s why we keep designing systems that make it so hard to know.
Until accountability is treated as a design principle, the industry will keep repeating the same story: another delayed payment, another insolvent contractor, another round of finger-pointing.
Secure your project payments today
We provide accessible, compliant escrow, TPMA and multi-currency IBAN accounts tailored for the construction and engineering industry. We partner every client with a hand-picked sector payment specialist who provides personalised service for your business.
With your escrow account, you also receive:
50+ currency wallets with live rates & forward contracts
Access to payment rails in 160+ countries
Legal document drafting
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Book a call with our dedicated London-based escrow team to discover how we can help protect, guarantee and elevate your cross-border payments.