FIS CEO Iain McIlwee has spoken openly to the BBC, in an interview broadcast on both radio and tv news thoughout the day, about millions of pounds owed to companies following the collapse of ISG last year and how promises that they would be protected by Project Bank Accounts seem to have been as empty as the bank accounts themselves.

The BBC investigation follows the failing of Project Bank Accounts which the MOJ said were being used on projects to upgrade three prisons in England.

At least 40 companies are believed to be owed the money for work they carried out in Birmingham, Liverpool and Dorset, and claim they should have been protected because the Ministry of Justice (MoJ) promised to pay for the projects through ring-fenced Project Bank Accounts (PBAs).

Project Bank Accounts were designed to safeguard smaller suppliers by holding payments in dedicated accounts that can only be used to pay them.  Money paid into PBAs should be handed out to suppliers almost automatically.  However, administrators EY-Parthenon insisted that when appointed the accounts had “nominal funds” in them, meaning the money was probably never paid in by the MoJ, with FIS CEO Iain McIlwee, describing the situation as a “mystery”.

Iain added:

“This is having a huge impact on small business owners, with some facing bankruptcy themselves and others struggling with significant mental stress and heartache.

“They are fighting to get back what they should have been paid 12 months ago. Companies are people and these are people in trouble that need the support of our government.”

FIS is supporting some of the businesses that are owed money by co-coordinating legal action alongside law firm Hill Dickinson.

Sarah Emerson, partner at Hill Dickinson, said they were engaged in pre-action correspondence with the MoJ on behalf of seven firms who worked on the projects. She said that her clients were small companies who felt let down and could not understand what had happened to the money they were owed.

“They were told this was a positive thing because [PBAs] would protect them from an insolvency event,” she said.

“They are set up as a trust mechanism which means funds are ring-fenced.  This means money in those Project Bank Accounts legally belongs to those that are due to be paid.”

Sarah Emerson said her firm could take the MoJ to court over the dispute

You can read the full article on the BBC website at https://www.bbc.co.uk/news/articles/c4gwz8gg6plo

Further coverage is also available on the following channels:

• Radio WM – Listen Live – BBC Sounds (approx 90 mins in
• BBC Radio Leicester – Ady Dayman (just after the 7am and 8am news).

In response to the Government’s consultation on tackling late payment and retention in the construction sector, FIS has submitted its formal response on the package of proposed legislative measures to address late, long and disputed business to business payments.

A copy of our collective response is available here.

Commenting on the response, FIS CEO, Iain McIlwee stated:

“For decades, FIS has fought tirelessly to expose and dismantle the broken payment and retention practices that plague the construction sector.   Drawing on powerful evidence from the Reading Report and direct member testimony, FIS response paints a stark picture: specialist contractors are routinely forced to finance projects upfront, endure months without payment, confronted by routine undervaluation and weaponisation of cash flow issues and suffer devastating losses when retention monies vanish due to insolvency.  The current system is adversarial, opaque, and punishes the very businesses that build our spaces.  It undermines investment and impairs modernissation. 

FIS supports bold reform—mandatory 60-day payment terms, statutory interest on late payments, and the abolition or protection of retention funds. 

The message is clear: enough is enough. Reform is not optional—it is essential to protect livelihoods, restore trust, and unlock the full potential of UK construction.”

The consultation acknowledged that late payment costs the UK economy almost £11 billion per year and closes down 38 UK businesses every day. The proposed package of measures are claimed to be the most significant attempt to address late, long and disputed business to business (B2B) payments in over 25 years. They aim to improve cash flow through supply chains and support small businesses with payment disputes. There are also specific proposals referring to the use of retention clauses within construction contracts.

The consultation outcome will be published within 12 weeks of the close of the consultation, or an explanation will be published if this is not possible.  

If your business operates in the low and mid-rise housing sector, this is an important opportunity to make your voice heard.

In response to concerns raised by members, the Finishes and Interiors Sector (FIS) has commissioned the University of Reading and Barbour ABI to carry out research into how current supply chain management practices are affecting investment, productivity, and mental health across the sector.

The study will explore how procurement, contracting, and delivery methods impact productivity and skills development within the supply chain – vital insights to inform government as it works towards delivering 1.5 million new homes.

As part of this work, we are asking businesses to complete a short anonymous survey covering:

• Contracts

• Supply chain management

• Risk management

• Negotiation behaviours

• Price fluctuations within national deal agreements

• Payment and retention practices

The survey is open until 5pm, Monday 3 November 2025.

Take the questionnaire

Please complete the survey yourself or share it with the most relevant person in your organisation. We also encourage you to pass it on to other specialist contractors – the more responses we gather, the stronger and more valuable the research will be.

If you have any questions or comments, please don’t hesitate to get in touch.