The National Federation of Roofing Contractors (NFRC) has welcomed the launch of the government’s new Small Business Plan, a significant step that shows real intent to support construction SMEs.
Late, short and non-payment, often enabled by outdated and unfair mechanisms, continue to undermine productivity across the construction sector.
Chief among these is the practice of cash retentions, which NFRC has long campaigned to abolish.
James Talman, NFRC Group CEO, said: “This is a critical opportunity to end the unfair practice of retention once and for all. Our members consistently report this as one of their greatest business challenges, and it’s encouraging to see the government finally taking action.”
The scale of the problem is clear. A total of 80% of firms responding to NFRC’s latest State of the Industry survey said retentions affect their business.
NFRC has estimated that over £300m is currently locked up in retentions across roofing and cladding alone.
Time for a rethink
Following the collapses of Carillion and ISG, many subcontractors not only lost active jobs but never recovered retention payments. One member who lost £127,000 asked: “How has the supply chain been let down so badly?”
A 2017 Pye Tait report estimated £6bn is held in retentions across the UK construction industry at any one time, with £229m lost annually to insolvency, a figure likely higher today. And it’s not just the private sector: in 2023, 86% of NFRC Members faced difficulties recovering retentions from local authorities.
NFRC believes it’s time for a full rethink. While ensuring quality is essential, retentions are no longer fit for purpose, and alternatives that do not contribute to unnecessary insolvencies already exist. In roofing, long-term manufacturer and workmanship-backed guarantees, robust accreditation and skilled training schemes offer stronger, more proactive safeguards.
The federation will be calling for a complete abolition of retentions in sectors like roofing and cladding where better protections are already in place. For others, government must mandate Project Bank Accounts (PBAs) or adjusted trust accounts, successful models already proven overseas.
Make yourself heard
NFRC also welcomes other proposed reforms in the consultation, including: legally enforceable maximum payment terms, mandatory interest on late payments, fines for persistent late payers and enhanced powers for the Small Business Commissioner.
But real change depends on real voices. NFRC urges all roofing and cladding firms to respond to the consultation.
James added: “If you’ve ever written off a retention because chasing it cost more than it was worth, turned down a job because 5% couldn’t be spared, or cut staff or training due to cashflow issues, your experience matters. It takes minutes to respond, but could change the industry for decades.”
