|This week’s Wise Up Wednesday Guide for Specialist Contractors is a bit unusual in as far as it has an extract from yesterday’s business in the House Of Commons which included a question about retention.
We are all aware of the scourge of retentions in the construction and engineering industry, and as usual it’s you the Specialist Contractor that suffers!
Here’s Exactly How It Went
So here without further ado is the “discussion” which took place yesterday, sourced from the official record produced by Hansard;
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
What is his policy on the non-release or late release of cash retentions in the construction industry.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
Unjustified late and non-payment of a retention payment or any amount owed is unacceptable. These practices cause particular problems for small businesses in the construction sector, and the Government are committed to tackling them. We will shortly be publishing research into these issues, alongside a consultation document.
Stuart C. McDonald
The system of cash retentions has been wreaking havoc in the construction industry for decades. Can the Minister assure us that there will soon be radical action to overhaul the system, and can she explain why it has taken so long?
There is, indeed, far too much abuse of the system of cash retention, and it has been going on for too long. The burden of administrative time spent securing payments and the drain on working capital weigh far too heavily on smaller firms in the supply chain, and I can assure the hon. Gentleman that we will be taking action.
Toby Perkins (Chesterfield) (Lab)
If the Government had only listened in 2015 to the amendments the Labour party tabled to the Small Business, Enterprise and Employment Bill, we would already have a solution. We were told then that the Government were going to take action. We were told again a few months ago that they were taking action with their proposals about naming and shaming businesses that did not publish their late payments. We now have yet another consultation. Research from Crossflow Payments shows that 74% of small businesses do not believe that the Government’s recent changes will make any difference. Can we have a policy that actually enforces action on late payments, rather than the series of consultations that we have had?
I agree that action is needed, but it is important that we take the right action. We have undertaken a consultation, the results of which will be published shortly. That will be followed by a consultation on the 2011 changes to the Housing Grants, Construction and Regeneration Act 1996, which will consider the merits of ring-fencing retentions and the extent to which contractors are making the payment of retentions conditional on the performance of obligations under other, completely separate contracts.
There You Have It
And so the questions and the “discussion” moved on to something else entirely.
No wonder it takes so long to get any kind of action, let alone effective action!
So, don’t hold your breath, because whilst they keep on “consulting” nothing useful will ever get done. And remember that last time the Construction Act was amended it took 13 years…
So What’s To Be Done?
The current “Payment Law” in the form of the Construction Act is a lot better than nothing, and it exists to protect you, but it can’t do that if you don’t apply it. It’s not difficult to get your head around it, so please don’t be put off by thinking it’s legal mumbo jumbo that only lawyers can understand.
The Act gives you a good start in the battle to get paid properly, albeit that it takes a bit of getting your head around. And as always we are on hand to help you understand the law, and to take action on your behalf to ensure you get paid.
And if you haven’t yet downloaded our complimentary guide on how to get paid you can do so here; How To Get Paid
I sincerely hope to speak with you soon.
P.S. Please remember if you have a problem, take action sooner rather than later. If you’re not sure what to do or just want a second opinion, please give us a call on 01773 712116, or email firstname.lastname@example.org (please do not click reply to this email).
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