The government is at last considering a problem that affects many contractors and sub-contractors and blights the construction industry, namely, the issue of the non-release of retentions. I know from personal experience of clients who have suffered major issues because retentions are not released to them at an appropriate time. This consultation is looking at issues such as:
. How many parties have lost retention monies due to contractor insolvency.
. How some employers have unlawfully made payments of retentions conditional upon performance of obligations under other contracts.
. Non-payment of retentions which is affecting contractors and other subcontractors further down the supply chain.
The consultation is looking at payment of retentions in practice, whether they should be a limit on the time that retentions can be held together with possible alternatives like project bank accounts, escrow accounts and retention deposit schemes.
This is something that causes major issues for people in the construction industry and a solution to these issues would help all of us in the UK.
Retention payments in the construction industry Department for Business, Energy & Industrial Strategy Published: 24 October 2017 Summary A consultation on the practice of cash retention under construction contracts This consultation closes at 11:45pm on 19 January 2018 Consultation description The purpose of this consultation is to seek information on the practice of cash retention under construction contracts and gather views on the findings of the supporting documentation. The consultation is relevant to any party to a commercial construction contract as defined by the construction contracts legislation. It is also relevant to adjudicators, arbitrators and lawyers. While this consultation concerns construction specific legislation it may also be relevant for those with an interest in prompt payment more generally and to insolvency practitioners. The legislation does not apply to residential occupiers.