Several trade bodies involved in pushing new legislation for the mandatory use of deposit schemes to hold cash retentions will deliver petition to Downing Street next week calling for regulatory changes
BESA has claimed that over 100 MPs have now expressed support for efforts to ring-fence cash retentions. The claims have been made as the organisation seeks to push regulatory reforms through parliament that would mandate the use of third party deposit schemes.
Cross-party support for introducing new rules on how retentions are managed in the construction industry has increased since the formal announcement in January that construction giant Carillion was entering liquidation, BESA added.
A number of trade bodies such as the EPA and the SEC Group have worked alongside BESA to help develop the Construction (Retention Deposit Schemes) Bill, which was introduced to parliament by MP Peter Aldous just a week before Carillion’s collapse. If passed into law, the bill would make it mandatory for retentions to be held in a deposit scheme, rather than by a main contractor or client.
Later that same month, MP James Frith tabled an Early Day Motion calling on government to introduce new legislation to hold retentions in deposit schemes, with 61 MPs signing up to the call.
These separate focuses are being used as an example of growing political will for payment reform.
To Downing Street
A second reading of the Construction (Retention Deposit Schemes) Bill is scheduled for April 27. A number of trade bodies backing the legislation are planning a trip to Downing Street earlier the same week in order to deliver a petition on the need for the reforms to prime minister Theresa May.
BESA said it was confident that, including the 12 MPs that originally co-sponsored the retentions bill introduced by Peter Aldous, over 100 parliamentarians have expressed interest in supporting legislative amendments. This is based on confirmation received by itself, the ECA and the SEC Group.
MP Peter Aldous has argued that industry support for reform of what he called “outdated payment systems” had reached unprecedented levels that served as part of the basis for a petition to be delivered to Downing Street.
He added, “Construction is an essential underpinning of our lives and work, and we need to support the industry and especially SMEs to ensure future growth and prosperity.
“The petition being presented represents over 330,000 businesses and there are over 100 of my parliamentary colleagues that support reform to the practice of cash retentions.”
BESA chief executive David Frise said that anticipated cross-party support for retentions highlighted a growing sense that payment reform was urgently needed and came as industry was facing up to the loss of retention money held by Carillion.
He added, “In the wake of the Carillion collapse, a coalition of over 75 bodies (representing over 340,000 businesses) has united behind Peter Aldous’ retentions reform efforts, proposing that cash retentions owed to the supply chain are held in trust.”
“A delegation from this coalition will join Peter Aldous next week to present a petition to 10 Downing Street.”