The Scottish Government’s short life working group has set out plans to bring an end to the practice of withheld retention payments and deliver “an essential financial lifeline” for contractors
Among its many practical proposals submitted to the Scottish Government, the new report recommends a retention deposit scheme, the introduction of best practice policy and automatic release of retentions as early as possible.
It also says that the government should work with industry to ensure retention best practice is reflected in standard construction contracts, including dispute resolution and conflict avoidance procedures.
‘A potential game-changer’
Scotland’s construction trade association, SELECT, has hailed the new report on cash retentions as “a potential game-changer” – and says its recommendations could lead to greater reinvestment in the industry.
SELECT president Donald W Orr said: “The issue of retentions is one that has blighted the industry for many years, and this report makes it clear that there is a widely-held belief that change is long overdue.
“We welcome its recommendations and, if implemented, believe they could provide an essential financial lifeline that could save many businesses thousands of pounds every year.
“Retention monies could be reinvested by businesses in employing more apprentices, upskilling operatives or investing in new technology – bringing benefits to the wider industry and helping the whole construction sector build a stronger and more sustainable future.
“We therefore hope that the powers-that-be heed the advice in this report and have the courage to adopt what could be a potential game-changer for contractors.”
Engineering services sector body Actuate UK has welcomed the recommendations, Steve Bratt, CEO of ECA and lead on Actuate UK’s policy group on business practices, commented: “We welcome the recommendations from the working group in Scotland. Retentions abuse is still widespread across the UK and one of Actuate UK’s aims is to achieve full abolition of the practice.
“However, we recognise that certain steps should be taken towards this and we are therefore really pleased that the working group’s recommendations provide a clear framework for action and we look forward to industry and Scottish Government moving quickly to implement them.”
