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Second reading of retention bill scheduled

26 April 2018

Publication of the Construction (Retention Deposit Schemes) Bill has been announced in time for its second reading on 27 April.

It is a Private Member's Bill introduced by Conservative MP Peter Aldous, which had its first reading in the House of Commons earlier this year on 9 January.

There has been increasing levels of support announced for the bill from all parties, with more than 100 MPs expressing favour, along with a growing number of industry bodies.

It was also previously stated that there had been no opposition against the bill, providing further optimism that the long-running issue of retentions would finally be resolved.

The bill proposes that cash retentions will be required to be placed into a deposit scheme, where the funds will be protected if companies further up the supply chain go out of business.

It also stipulates that any clause in a construction contract enabling the deduction of cash will be invalid, unless the funds are protected.

Non-payment of retention monies has been highlighted as causing financial difficulties for many supply chain suppliers - a high percentage of which are FM service suppliers - causing companies to cease trading in the worst examples.

One of the industry bodies supporting the bill is the Specialist Engineering Contractors' (SEC) Group, which has highlighted the issue of retentions for many years and initiated its own attempts to resolve it.

Chief executive officer Professor Rudi Klein has been at the centre of these actions and highlights the high percentage of retentions included in the collapse of Carillion and its £7bn of liabilities.

"We know that ministers are sympathetic towards the bill but, at this stage, the government just issue a robust pubic statement of support for the bill," said Professor Klein.

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