Industry leaders march to Downing Street to deliver retentions reform petition

Politicians and construction firm bosses directly affected by Carillion’s collapse have gathered outside the gates of Number 10 to hand a petition to Theresa May which aims to reform the practice of withholding retention money in construction contracts.

Industry leaders from the Building Engineering Services Association (BESA), Electrical Contractors Association (ECA), Federation of Small Businesses and Federation of Master Builders which represent more than 355,000 construction businesses were on hand along with Conservative MP Peter Aldous to put pressure on the government to implement change.

The petition aims to bring about progress in the practice of retention payments in a bid to ensure there is not a repeat seen earlier this year when supply chain firms were left out of pocket following Carillion’s collapse. 

The Construction (Retention Deposit Schemes) Bill, otherwise known as the Aldous Bill, which proposes that cash retentions be held in trust accounts to protect the supply chain will receive its second reading in parliament this Friday (April 27). 

Commenting on the petition and bill, Aldous said: “The industry loses around £1m for each working day, mostly from SMEs. There have been proposals to stop the abuse of retentions before, but this time there is the largest coalition on fair payments ever.”

The private member’s bill was introduced by at its first reading on 9 January. It is the latest attempt made over many years by the Specialist Engineering Contractors’ (SEC) Group to end the practice of retentions in the construction industry.

The Bill is supported by more than 120 MPs and 76 industry trade bodies representing 355,000 companies and many more that are self-employed. Retention payment reform has also received cross-party support from the Conservatives, Labour, Liberal Democrats, SNP, DUP, Plaid Cymru and the Green Party.

BESA chief executive David Frise added: “Retentions and delayed payment put thousands of firms at risk of insolvency and undermine their efforts to invest in skills, training and improved productivity. The government will surely want to be seen to protect SMEs and to ensure the construction industry is sustainable so it can deliver its ambitious plans for housing and social welfare. SMEs are crucial to the government’s built environment and infrastructure programme.”