No-retentions campaign gets underway
The National Specialist Contractors Council has launched a no-retention policy at an event attended by over a hundred key clients, contractors and suppliers. The policy has the support of the council’s 32 member organisations and is aiming to eliminate cash retentions by providing specialist contractors with the support they need to resist retentions.
NSCC notes that high-profile clients such as Crossrail and Stanhope are increasingly recognising that there are better guarantees of quality than cash retention.
Development-company Stanhope removed retentions from its contractors some 20 years ago when it recognised that there was considerable disadvantage to its suppliers. Director Peter Rogers explains, ‘The passage of time has strengthened the case for our policy, having both improved relationships with suppliers and removed the risk of abuse.’
Crossrail, the biggest infrastructure project in the UK, has confirmed that its policy is not to include cash retention in its contracts, and it does not expect cash retentions to be withheld from the supply chain. Project bank accounts are used on Crossrail projects to to increase transparency and ensure that cash retention is not imposed on the supply chain.
By taking steps to create a more efficient and trusting environment in which to work, Crossrail is demonstrating that there is no longer a need for retentions in the construction industry, and NSCC expects other major clients to follow suit.
A fair-payment-campaign web site has been set up and has a dedicated section on retentions, with helpful guidance and tools on how to implement a no-retention policy.
Retentions can lead to specialist sub-contractors seeing 2.5% or more of payment due being withheld for a year, or longer. Recent cases have revealed main contractors with a retention of 2.5 or 3% imposed on them subsequently enforcing 5% on the specialist contractor.