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Government questioned by MPs over cash retentions

29 June 2017

Requests for the government to report on its progress on dealing with the issue of cash retentions have been lodged by SNP and Labour MPs this week.

The issue is particularly relevant to the construction industry supply chain, which is also of considerable importance to the FM sector.

SNP MP Stuart C McDonald asked the Department of Business Energy and Industrial Strategy (BEIS) to reveal its plans of tackling the "non-release or late release of cash retentions".

Labour MP for Chesterfield Toby Perkins echoed Mr McDonald's question.

A review of the situation regarding cash retentions was promised by the government last year and was due for publication in late 2016.

BEIS Minister for Small Business Margot James MP stated that the results of the review will be published in the near future.

It will incorporate a Construction Act review and actions, including the ring-fencing of retention payments, she said.

Further concerns on cash retentions were raised before the recent General Election by SNP MP Alan Brown, who said the problem had been ongoing "for around 50 years".

He further stated that he had received cross-party support for a private Member's Bill in the previous Parliament.

"I even had support from the DUP, so perhaps it really is something that should be brought to the table," he said.

"If we want to increase productivity and have more efficient infrastructure, it really would be an easy start," said Mr Brown.

Numerous reports over the abuse of cash retentions have been lodged by companies working in both the private and public sector, resulting in the restriction of cash flow for those affected.

Following lobbying by a number of MPs and industry bodies throughout 2015, the government stated in early 2016 that requests for action on cash retentions were "knocking on an open door".

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