National Federation of Roofing Contractors (NFRC) members and other industry representatives were at the Houses of Parliament this week to discuss with MPs and Lords the problems caused for sub-contractors by cash retentions.
The NFRC estimates that £300 million of cash is held in retention just in the roofing and cladding industry, with a survey of its members revealing that 78% of contractors say they are facing levels of retention that are higher or the same as were seen a year ago.
The surveys also saw contractors call the process of chasing overdue retention payments ‘unnecessary’, ‘tortuous’ and ‘psychologically damaging’.
The NFRC is now calling on government to engage with sub-contractor organisations on the retentions issue, and inform them on why these firms would benefit from an end to the practice.
Parliamentarians who attended the event were supportive of the message and recognised reports from contractors that retentions can contribute to serious financial difficulties. The NFRC will continue to work with them to take the issue to government.
James Talman, CEO of the NFRC, said: “At best, retentions are an extra burden on time-poor microbusinesses, at worst, they reduce sub-contractors to operating at a loss and sometimes even facing insolvency.
“Ending this practice would encourage business investment in skills and expansion by improving construction SME cashflow, freeing up hours of wasted time chasing owed monies, and reduce the number of sub-contractor businesses that decide they just cannot carry on. This outdated practice has persisted for long enough, and government should lead the way on bringing it to an end. Retaining skills and not cash has better outcomes all around.”