London follows Welsh move to end retentions
On January 9th at the Houses of Parliament, Peter Aldous MP will introduce the first reading of a Ten Minute Rule Bill that seeks to amend the 1996 Construction Act and ensure that retentions within construction are held in a third party trust scheme.
This is a significant step that BESA and ECA have been campaigning for jointly for some time. Both bodies endorse the Bill and will fully support it through its progress in Parliament. In addition, both associations anticipate significant additional political and industry support for the Bill.
Recent research by Pye Tait on retentions has shown that over £700 million worth of retention money has been lost due to upstream insolvency in the past three years and that on average £27,500 is held in retention per contractor. In an industry of 280,000 SMEs, around 40% of contractors have suffered non-payment through upstream insolvency in the last three years.
In related news, the Welsh Parliament has already announced that from 1st January 2018, project bank accounts (PBAs) will be used on building projects over £2 million when procured by Welsh Government bodies.
Peter Davies, chairman of the Specialist Engineering Contractors (SEC) Group Wales said: “We have been the leading exponent of PBAs since they are the most effective method for ensuring regular and secure payments to construction supply chains, especially SMEs.”
