Organisation argues that a broad coalition of construction industry groups backing mandatory deposit schemes for retentions reflects unprecedented support for payment reform
BESA has said that more than 60 construction and maintenance trade bodies have now lent their support to the Construction (Retention Deposit Schemes) Bill that was introduced to parliament in January as a means to reform payment within the construction supply chain.
The bill, which was devised by MP Peter Aldous and a number of trade bodies such as BESA, the ECA and the Specialist Engineering Contractors’ (SEC) Group, would require cash retentions to be held in approved third party deposit schemes if approved.
An unprecedented coalition of trade bodies and industry representatives are getting behind the proposed legislation, which is also receiving growing political support, in order to push for new approaches to managing cash retentions, the organisation has argued.
BESA said that a growing number of stakeholders in the construction industry are now backing the mandatory use of trusts to hold retentions in light of construction giant Carillion entering administration. These stakeholders include electrical, plumbing, heating, house building, roofing and scaffolding groups, as well as trade bodies such as the Federation of Master Builders and the Federation of Small Businesses.
Peter Aldous said that the strength of support for the bill, which is scheduled to have a second reading in parliament on April 27, reflected the consensus across the construction supply chain for reform and growing concerns about how upstream insolvency may impact smaller companies.
Mr Aldous said, “Support covers so much of the industry that we now have a golden opportunity to change construction for the better.”
“I hope government gets behind industry and this bill. We need action to protect SMEs before more millions are lost, and this bill is about ensuring people’s money is safe so businesses can grow and invest in their future.”
Alexi Ozioro, public affairs and policy manager at BESA, argued that the government had a real opportunity to show it was able to respond to urgent developments and legislate on issues outside of Brexit by backing the bill.
He said “It will take months, maybe years to feel the full effect of Carillion, and what this bill will do is make sure thousands of people can enjoy a more secure future.”