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Nearly £700m lost in cash retentions in three years

14 November 2017

Government research has revealed that just under £700m of cash retention funds have lost in the construction sector due to insolvency over the last three years.

Conducted by consultant Pye Tait for the Department of Business, Energy and Industrial Strategy (BEIS), the survey was conducted last year and therefore reflects 2016 prices.

These results add further to the many requests from all areas of industry over a considerable period of time for cash retentions to be placed in ring-fenced trust funds.

This would protect them in the event of those in charge of the funds going into liquidation and becoming lost.

Specialist Engineering Contractors' Group chief executive officer Rudi Klein is one of those to have called for retentions to be placed in protected funds for many years.

"The bulk of these monies will have been lost by SMEs," said Professor Klein.

"They legally belong to the firms from whom the monies were withheld; consent to the withholding of the monies did not extend to their being used to pay off the insolvent party's creditors.

"This represents a scandalous and continuing drain on the scarce resources of SMEs in the construction industry."

SEC Group has campaigned for some time for all cash retentions to be deposited with independently-run deposit schemes.

"Given the dire finances of some of the UK's largest construction companies, it is even more urgent that Parliamentary time is secured for legislation to protect retention monies," said Professor Klein.


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