Construction Industry (Protection of Cash Retentions) Bill 2016-17

On 28th April 2017, Scottish National Party MP Alan Brown (Kilmarnock and Loudoun) attempted to introduce a Bill to make provision to safeguard, and for the release of, cash retentions in the construction industry; and for connected purposes.

Background: Private Members' Bill (under the Ten Minute Rule)

A Ten Minute Rule Bill is the first reading of a Private Members Bill in parliament - the sponsor (Alan Brown) was allowed to make a 10-minute speech outlining the reasons for the proposed legislation.

Principles of the Construction Industry (Protection of Cash Retentions) Bill

Alan Brown's 10-minute speech set set out the foundations for construction reform convincingly.  You can read the full speech here.

In it, there are several soundbites that will resonate with readers of this page, particularly with sub-contractors:

• Having worked in the construction industry, I understand the origins of the retention system and, to be fair, I also know how hard it sometimes can be to get a subcontractor back on site to address snagging issues. The reason for that is often that they have moved on to another job and so the resources are not immediately available. That said, it is seldom that subcontractors would not fulfil their obligations, and so when they do so they expect the money to be released when it is due to them. If they comply, why should they not receive the money in a timely manner? I ask the House: why, in the 21st century, are we dealing with unprotected cash retentions?
• This Government continually acknowledge a productivity problem in the UK, yet we have smaller companies struggling with cash flow, stressed and having to put man hours into chasing up these cash retentions. Surely resolving this issue can only improve productivity, in terms not just of the man hours saved through not having to chase up the retentions, but of money released for investment in new equipment or job creation, which will further improve productivity.
• The Banwell report, prepared for a Government 53 years ago, recommended the abolition of retentions, and 23 years ago the Latham report, a joint construction industry and government report, recommended that cash retentions should be at least protected in a trust account. We operate a tenancy deposit scheme to protect individuals in the private renting sector, yet for some reason there has still been no will on the part of Governments to do something with these construction “deposits”.

Progress of the Construction Industry (Protection of Cash Retentions) Bill

The Bill enjoyed its first reading in Parliament on 28th April 2017.  Unfortunately, at the time, the country faced bigger problems.  The previous summer, David Cameron (then Prime Minister) had resigned, with Theresa May being promoted to the top job.

May, who had at no point been elected by the public, called the election on 18th April 2017, entirely overshadowing the progress of this Bill.  The election was planned for 10th June 2017 and took place on that day.  This Bill with the end of that Parliamentary session and never received its second reading.

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