SELECT has added its support to calls for action over the controversial issue of cash retentions in the construction sector.
The campaigning trade body for Scotland’s electrical sector said it was highlighting the issue ahead a UK Government review of the Construction Act, which could include actions such as the ring-fencing of money owed to subcontractors.
Stuart McDonald, SNP MP for Cumbernauld, Kilsyth and Kirkintilloch East, has tabled a parliamentary question about the late or non-release of cash retentions. He was supported by Toby Perkins, Labour MP for Chesterfield.
Earlier this year, the Specialist Engineering Contractors’ Group (SECG) claimed more than £1 billion in cash retentions is currently being withheld by top construction companies in the UK.
Newell McGuiness, managing director of SELECT said, “We wholeheartedly support action on this troubling issue and look forward to positive developments in the upcoming review of the Construction Act.”
The SEC Group published a report two years ago, which reportedly revealed that public bodies were denying Scottish firms access to cash owed to them, simply to improve their own cash position regarding working capital. The research also showed that while many bodies paid their primary contractors within 30 days, little effort was made to ensure secondary or sub-contractors were treated the same way.