NFRC regularly receives feedback from Members that the practice presents a significant problem for their cashflow. NFRC’s latest survey on retentions saw contractors describe the practice as ‘unnecessary’, ‘tortuous’ and even ‘psychologically damaging’.
With construction facing around 4,000 insolvencies over the last twelve months,
contractors are increasingly worried that their retention monies will be swallowed by a company that ceases to trade, and that it will take so long to draw down other retention monies that they may have issues with their own cashflow.
In recent months, NFRC has embarked on a renewed push to bring the issue to the attention of the UK government, on the basis that UK SMEs should have access to the cash they have earned in order to invest in skills and technology. The Department of Business and Trade has had some degree of awareness of the issue for an extended period of time but has failed to produce a comprehensive policy position beyond the repeated statement that it is under consideration.
This campaign was catalysed in July by the attendance of NFRC Members, as well as other construction industry representatives, at an evening reception at the UK Parliament to bring the issue directly to politicians. Andrew Lewer
MBE MP, Chair of the All Party Parliamentary Group on SME Housebuilders, was the parliamentary sponsor of the event and NFRC are still working with Andrew to take this work forward.
As a direct result of the event, cash retentions has now been raised in both the House of Commons and House of Lords by politicians who attended—but this is only the beginning of the task of bringing retentions back to the relevant ministers’ attention.
Work to make progress is therefore ongoing.
NFRC Members who are affected by retentions can:
- sign the letter to the relevant ministers on retentions,
- use NFRC’s template to write individually to their own MP on the issue,
- and complete the ongoing survey of members about retentions.
By completing these things, it ensures that there is as much evidence to give government as possible when NFRC engages with them.
