SEC calls on councils for better retentions practice
The Specialist Engineering Contractors (SEC) Group is calling on local authorities to protect retention monies belonging to SMEs in their supply chains. The SEC conducted a survey of local authorities to highlight their use of retentions and the lack of guidance on bestpractice.
Over 77% of local authorities deduct a 5% cash retention. And 53% of councils use these retentions to bolster their working capital or to fund other activities – 6% of councils invest the retentions in overnight money markets. Over 62% of councils are failing to ensure that 30 day payment clauses are included in sub-contracts.
SEC Group president, Lord O’Neill says that parliament is becoming increasingly anxious about the position of SME’s in construction: “We have repeatedly asked the government to take action on cash retentions by adopting the Aldous Bill.”