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More than 100 MPs back retentions reform bill post Carillion


Political support for a construction retentions reform bill has soared following Carillion’s collapse.

More than 100 MPs including defence secretary Gavin Williamson, shadow chancellor John McDonnell, Liberal Democrat leader Vince Cable and Green Party leader Caroline Lucas support the bill, according to the Building Engineering Services Association (BESA). 

In fact, one in six MPs is now understood to be backing the planned reforms.  

Designed to provide security for cash retentions against insolvencies of parties up the supply chain through the introduction of retention deposit schemes, the proposal was first heard in parliament six days before Carillion entered compulsory liquidation on January 15.

However the collapse of the construction giant has brought the issue of retention payments into the spotlight. 

Electrial Contractors Association director of business Paul Reeve said: “Carillion’s collapse highlighted serious supply chain and procurement problems in construction, which need an urgent remedy.”

In the aftermath of Carillion’s liquidation trade bodies Build UK, the Civil Engineering Contractors Association (CECA) and the Construction Products Association (CPA) estimated that the failed contractor held around £800M in retentions when it went bust.

A survey of 137 BESA and ECA members showed the average retention is 5% of money payable to subcontractors. This exceeds many supply chain profit margins. The survey also shows that 92% of respondents had faced construction retentions in the last three years.

Conservative MP for Waveny, Peter Aldous - who first introduced the bill - said: “Industry support for reform to outdated payment systems is at unprecedented levels, for which I am very grateful. Construction is an essential underpinning of our lives and work, and we need to support the industry and especially SMEs to ensure future growth and prosperity.

“The petition being presented represents over 330,000 businesses and there are over 100 of my Parliamentary colleagues that support reform to the practice of cash retentions.

“We have a golden opportunity to improve the industry for the better, level the playing field for SMEs and protect thousands and thousands of jobs.”

He added: “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.”

A petition will be presented to Downing Street on Monday ahead of the bill’s second hearing in the House of Commons next Friday. 



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