In a statement issued on 9 December, the Construction Leadership Council (CLC) has confirmed its support for Build UK’s Roadmap to Zero Retentions and encouraged industry to implement the new minimum standards when using cash retentions. The CLC’s support marks another significant milestone for the roadmap, which sets out specific actions in a phased approach for the construction industry to achieve zero retentions.
Recent milestones delivered as part of the roadmap include publication of the retention policies of major public sector clients in November to provide increased transparency. This followed publication of the Minimum Standards on Retentions in July which aim to reduce the existing challenges with cash retentions.
The CLC has urged construction firms and clients to adopt the minimum standards, which incorporate and build on the CLC’s commitment to abolish cash retentions.
FIS chief executive said:
“It is encouraging to see a unified approach, but I want to see a foot on the gas here. We’ve had enough of backstops and a backstop of 2025 is too far away, let’s rally and get this done by 2023. Retentions are an archaic way to manage quality and no longer fit for purpose. They undermine a positive culture and on balance I believe they contribute to the problem that they were designed to solve. Sadly I think we all know that and truth be told, all they are is a hangover of credit issues within the sector. So let’s get shot by 2023 at the latest, but also recognise that this is not the only place where the supply chain needs to improve in terms of payment. We still do the variations dance at the end of virtually every contract and use delay tactics to avoid paying til the last possible moment (sometimes sadly a moment too late for some companies), these are the shackles that hold this great sector back and contribute to stress and tension in the supply chain”
Andy Mitchell, Co-Chair of the CLC, said:
“The CLC believes that adopting the minimum standards will enable the industry to make progress towards the objective of achieving zero cash retentions by 2025. It will demonstrate commitment to the supply chain, whilst allowing the industry and its clients to adapt and improve standards of quality. Therefore, the CLC urges firms within the industry and construction clients, in both the public and private sectors, to support the roadmap and adopt the minimum standards, as a pragmatic means of improving prompt and fair payment practices and helping to create a stronger and more sustainable industry.”
Jo Fautley, Deputy Chief Executive of Build UK, said:
“It is encouraging to receive the endorsement of the CLC for the work that we are doing to move towards zero retentions as part of our roadmap. Achieving zero retentions is a vital part of becoming a more collaborative and efficient sector, and our roadmap sets out practicable steps for the industry to implement as we move towards this goal.”