News, views and opinions from the UK roofing industry

One in four MPs back retentions bill

MPs overwhelmingly back ring-fencing of subcontractor’s money in the wake of the Carilion collapse

More than 170 MPs showed their support for the Construction (Retention Deposit Schemes) Bill 2017-19, as its second reading was pushed back to 26 October 2018.

Commonly known as the Aldous Bill after former chartered surveyor Peter Aldous MP, it proposes to protect retention deposits within a third-party trust scheme.

Peter Aldous MP put forward his Private Members Bill in January during the demise of Carillion, when the issue of retentions came under the public spotlight for the first time. Main contractors typically hold back around 5% of a subcontractor’s payment until project completion as a way to ensure works meet quality standards.

However, critics argue that the practice is unfair since it applies to the all elements of the project irrespective of the work packages that different trades are working on and passes on risk from main contractor to the supply chain. This was revealed in the collapse of Carillion, which used retentions to bolster its cash flow.

The Aldous Bill was passed the first reading unanimously, however many trade associations, including the NFRC, would prefer to go much further and ban retentions altogether.

In his interview with Roofing Times, James Talman said:

“We understand the motive for this Bill but it doesn’t get rid of the problem. We therefore support Build UK’s position, which is to seek zero cash retentions but feel the target date of 2023 is lacking urgency.”