Scottish Government to launch consultation on cash retentions

THE Scottish Government has revealed that cash retentions in the construction industry will be among the issues considered as part of a consultation planned for 2019.

The use of cash retentions in the sector remains commonplace despite some industry stakeholders expressing concern that the practice is outdated and unfair.

Announcing the intention to consult in spring 2019, Minister for Business Jamie Hepburn said, “Cash retention in construction industry contracts is common practice, including in the public sector. Its purpose is to ensure the contractor completes the job. However, it must be used proportionately and responsibly. The Scottish Government believes in fair and transparent working practices and a culture that supports prompt payment is essential to secure investment and jobs. Having listened to the construction industry’s concerns, a public consultation on the use of retentions in construction contracts will take place in spring next year.

“The Economic Action Plan sets out our intention to step up our engagement with the construction sector to support its plans to develop and grow a more sustainable, productive and innovative industry. This consultation is just one part of that.”

Ken Gillespie, chair of Construction Scotland added, “Construction Scotland welcomes the Economic Action Plan’s intention to step up engagement with the construction sector and believes that, in the case of retentions, the aim should be to see them abolished completely by 2023. The failings in the system are widely recognised and there have been many calls for the industry’s customers and contractors to end their use. These have failed to gain traction, due principally to the lack of experience of, or research into, the use of alternative forms of project assurance.”