Tag : ECA
A new bill to be introduced to parliament that sets out new rules for managing cash retentions will be backed by a number of industry bodies such as BESA and electrical and engineering services group ECA.
A new bill mandating that all cash retentions from construction work are held in deposit protection schemes receives its first reading in parliament today.
Engineering services firms providing gas, fire, heating and ventilation services are owed roughly £75m from construction and services giant Carillion, which formally announced its liquidation last week.
BESA and the ECA hope to step up pressure on the government to overhaul cash retentions by calling for the introduction of mandatory third-party deposit schemes in a joint response to a recent consultation.
Over a quarter of 316 engineering services firms surveyed on their financial performance have reported a fall in turnover during the first quarter of 2018, the highest falls of its kind in two years. The findings reflect the impact of adverse weather conditions and the fall of Carillion earlier this year.
A second reading in parliament of a bill intended to ringfence cash retentions within the construction supply chain will be further delayed until October, with trade bodies supporting the bill hoping to use the time to build wider consensus among MPs to push for reform.
Network Rail’s pledge to reform prompt payment practices and abolish the use of retentions in its contracts has been hailed as a strong template for the wider construction industry and building services sector to follow.
Almost nine out of ten local councils in the UK are failing to pay companies for construction work within the legally required 30-day period, according to findings from BESA and the ECA.
A survey of 372 individuals working across the engineering services sector has found that over three quarters of respondents saw turnover increase or remain steady during the second quarter of 2018, even with increased labour and materials costs.
The government has pledged from Autumn next year to consider blacklisting companies from public sector construction projects that are found to be paying their suppliers late.