SELECT hails recommendations in new retentions report as ‘game-changer’

David Orr is president of SELECT.
David Orr is president of SELECT.

SELECT has hailed a new report on cash retentions as “a potential game-changer” – and says its recommendations could lead to greater reinvestment in the industry.

The campaigning trade body says the in-depth review by the short life working group (SLWG) could bring an end to the practice of withheld retention payments and deliver “an essential financial lifeline” for contractors.

Among its many practical proposals submitted to the Scottish government, the new report recommends a retention deposit scheme, the introduction of best practice policy and automatic release of retentions as early as possible.

It also says that the government should work with industry to ensure retention best practice is reflected in standard construction contracts, including dispute resolution and conflict avoidance procedures.

Donald W Orr, president of SELECT, said: “The issue of retentions is one that has blighted the industry for many years, and this report makes it clear that there is a widely-held belief that change is long overdue.

“We welcome its recommendations and, if implemented, believe they could provide an essential financial lifeline that could save many businesses thousands of pounds every year.

“Retention monies could be reinvested by businesses in employing more apprentices, upskilling operatives or investing in new technology – bringing benefits to the wider industry and helping the whole construction sector build a stronger and more sustainable future.

“We therefore hope that the powers-that-be heed the advice in this report and have the courage to adopt what could be a potential game-changer for contractors.”

He added: “While we would obviously like to see retentions abolished completely, these recommendations are certainly a step in the right direction and we hope the Scottish government brings them to fruition.

“In particular, we would like to see the introduction of a statutory custodial retention deposit scheme, along with the automatic release of retentions as early as possible, unless a clear issue has been identified. We would also welcome the requirement for contracting authorities to publish their retentions policy and, if they deviate from it, to be made to explain why.”