The purpose of this consultation is to seek information on the practice of cash retention under construction contracts and gather views on the findings of the supporting documentation.
The consultation is relevant to any party to a commercial construction contract as defined by the construction contracts legislation. It is also relevant to adjudicators, arbitrators and lawyers. While this consultation concerns construction specific legislation it may also be relevant for those with an interest in prompt payment more generally and to insolvency practitioners. The legislation does not apply to residential occupiers.
CIOB supports prompt and fair payment in the construction industry. There is evidence that some payment practices prevalent in the construction industry are a barrier to investment, productivity improvements and growth. This consultation aims to seek information on the practice of cash retention under construction contracts and gather views on the supporting documentation.
The CIOB has made a general response to this consultation utilising member feedback. We believe that the retention system does require an overhaul and would like to see the Government legislate for zero retentions in the future. The full response can be accessed below.
Related Link: Consultation on gov.uk