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Government Consultation on Retentions in the Construction Industry

December 03 2017

Government has launched a consultation on the practice of using retention payments in the construction industry. Views are sought from businesses that use or are affected by retention payments and should be submitted before January 19 2018.

Research commissioned by the Department for Business, Energy and Industrial Strategy found that 4.5 billion of retentions were held in the construction industry in any year, and that delays to payment and non-payment of retentions was commonplace. Furthermore, evidence was found that contractors have been linking the release of retention payments from one contract with a subcontractors' performance on a separate contract, a practice which has been illegal since 2011.

The consultation aims to assess the extent of the problems caused by the non-payment or late payment of retentions and to look for measures that might improve the situation for small construction subcontractors.

For more details about the consultation, see this blog article.

Samantha White, CEO of My Credit Controllers commented:

"The government's interest in this area is to be welcomed. It is to be hoped that measures such as ring-fenced accounts to protect subcontractors from insolvency further up the chain will be adopted. In the meantime My Credit Controllers has extensive experience of collections in the construction industry, including late retention payments. If you are having trouble getting a retention payment from a customer, why not get in touch?"

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