They are calling for a simple but key reform to see retentions held in a statutory deposit scheme rather than being held in clients or main contractors bank accounts.
This trust account system is being used in Australia and prevents the temptation for clients to use their supply chain’s cash.
The trade groups represent all the key specialist trade bodies from demolition, to steelwork, building services and fit-out.
Around £10.5bn is being held in retentions at anyone time, choking company investment in jobs and growth.
An estimated £7.8bn in owed retentions has gone unpaid in the construction sector over the last three years, and in the same period £700m was lost due to upstream insolvencies.
The government is consulting industry on retentions. But many specialist trade bodies that have been fighting against retentions for decades fear the Government will once again kick the issue into the long grass as Brexit consumes Parliamentary time.
In a statement the bodies says: “Reforming retentions would be a good way for the Government to show it is truly standing up for the interests of small and medium-sized businesses, and is willing to put them at the forefront of plans for an industrial strategy and the expansion of the UK economy. ”
“Poor payment practices in construction affect productivity, innovation and investment, holding back the sector’s overall capacity to do business and invest in the workforce.
“With construction a cornerstone of enterprise in the United Kingdom and fundamental to enhancing the country’s built environment, the problem of retentions cannot go on, but needs tackling as a priority.”
Signatories to call for Government retention reform
• ECA, electrotechnical and engineering services trade body – Paul Reeve, Director of Business
• Building Engineering Services Association (BESA) – Rob Driscoll, Director of Legal & Commercial
• SEC Group – Trevor Hursthouse OBE, Chairman
• British Constructional Steelwork Association (BCSA) – Sarah McCann-Bartlett, Director General
• Lift and Escalator Industry Association (LEIA) – Nick Mellor, Managing Director
• SELECT – Alan Wilson, Director of Communications
• National Federation of Builders – Richard Beresford, Chief Executive
• Association of Plumbing and Heating Contractors (APHC) – John Thompson, CEO
• Scottish & Northern Ireland Plumbing Employers’ Federation (SNIPEF) – Fiona Hodgson, Chief Executive
• Contract Flooring Association – Richard Catt, CEO
• Structural Timber Association – Andrew Carpenter, Chief Executive
• British Blind and Shutter Association – Andrew Chalk, Director of Operations
• Confederation of Construction Specialists – Gerald Kelly, General Manager
• Federation of Traditional Metal Roofing Contractors (FTMRC) – Nigel Johnston, General Manager
• Lead Contractors Association – Nigel Johnston, General Manager
• National Association of Shopfitters – Robert Hudson, Director
• National Federation of Demolition Contractors – Howard Button, CEO
• Chartered Association of Building Engineers – Tony Ginda, Membership Development Manager
• Federation of Environmental Trade Associations (FETA) – Russell Beattie, Chief Executive
• Scaffolding Association – Robert Candy, Founder
• Stone Federation Great Britain – Jane Buxey, Chief Executive
• Glass & Glazing Federation – Phil Pluck, Group Chief Executive
• Finishes & Interiors Sector (FIS) – David Frise, CEO