NFRC Visits Parliament to Talk about Retentions

MEMBERS of the National Federation of Roofing Contractors (NFRC) are at the Houses of Parliament this evening (5 July) to talk to MPs and Lords about retentions.

NFRC and other industry representatives will be raising the politicians’ awareness of the problems caused for sub-contractors by cash retentions.

Retentions is the construction industry term for monies withheld from contractors by customers. It is ostensibly designed to ensure that any problems found with the work after the project is completed, are addressed.

However, in recent years, retentions have become normalised practice in construction, effectively becoming an automatic and unagreed ‘discount’ applied to subcontractors’ bills.

Parliament – Retentions

NFRC estimates that £300m of cash is held in retention just in the roofing and cladding industry.

Despite efforts by some organisations in the wider construction industry to decrease the use of cash retentions, recent surveys of NFRC members show that 78% of contractors say they are facing levels of retention that are higher or the same as a year ago.

The surveys also found that contractors describe the process of chasing retention payments as ‘unnecessary’, ‘tortuous’ and ‘psychologically damaging’.

NFRC is calling on government to engage with sub-contractor organisations on the retentions issue, and inform them about why small firms would benefit from an end to the practice.

James Talman, CEO NFRC

James Talman, NFRC CEO, said: “At best, retentions are an extra burden on time-poor microbusinesses, at worst, they reduce sub-contractors to operating at a loss and sometimes even facing insolvency.

“Ending this practice would encourage business investment in skills and expansion by improving construction SME cashflow, freeing up hours of wasted time chasing owed monies, and reduce the number of sub-contractor businesses that decide they just cannot carry on.

“This outdated practice has persisted for long enough, and government should lead the way on bringing it to an end. Retaining skills and not cash has better outcomes all around.”

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