Construction Sector: Roadmap to Zero Retentions

Lord Aberdare Excerpts

Wednesday 15th December 2021 Lords Chamber

Asked by

[Lord Aberdare]

To ask Her Majesty’s Government what steps they plan to take to support the implementation of Build UK’s Roadmap to Zero Retentions, seeking to eliminate cash retentions in the construction sector by 2025, further to its endorsement by the Construction Leadership Council on 9 December 2019.

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, the Government are working in conjunction with the Construction Leadership Council to support the implementation of the Roadmap to Zero Retentions. Work is being undertaken by the business model workstream of the council. This includes building on the work of the Get It Right Initiative, to drive improvements in quality and reduce the need for retentions through the construction industry and exploring alternatives to cash retentions.

[Lord Aberdare (CB)]

My Lords, the Build UK roadmap and its endorsement by the Construction Leadership Council demonstrate a welcome degree of consensus across the sector that action is urgently needed to eliminate the pernicious practice of retentions, as well as outlining a route to doing so. The Minister’s response indicated a sort of waiting game that retentions might die out of their own accord. There is a general feeling that legislation is needed to bring an end to retentions, so I ask him: what is the plan to reach the 2025 target date, and when will legislation be introduced to achieve it?

[Lord Callanan (Con)]

I understand that the noble Lord has strong feelings on this issue; indeed, we met to discuss this a few months ago and he has previously asked Questions on it, so I know his passion on the subject. The problem is that there is no general feeling that legislation is required. Some people passionately believe in the need for primary legislation, but obviously there is some opposition as well. We continue to believe that the best way forward is for an approach that all sides can agree on to be taken forward by the Construction Leadership Council.

--- Later in debate ---

[Lord Callanan (Con)]

As I said in response to a previous question, I agree with my noble friend that we need to try to drive some action in this area. But a statutory ban is a very blunt instrument, and it would be difficult without some alternative form of surety being put in place, so we are working with the industry to try to develop those models. My noble friend will know the issue very well from the work that she did.

[Lord Aberdare (CB)]

My Lords, the Minister mentioned the lack of consensus in this area. There is never going to be a complete consensus between one party which is withholding funds and the other party which is having them withheld. This is why action is needed by government to address the issue. I accept that the complete banning of retentions is a major step but that is why action is needed now to devise a path towards that eventual goal.

[Lord Callanan (Con)]

The noble Lord is partly right and there will always be some who will oppose it, but the Build UK Roadmap to Zero Retentions has been developed and is supported by its many clients. The construction firms and trade associations within the membership of Build UK, the Construction Products Association and the Civil Engineering Contractors Association, are supporting this initiative. There are some hopeful signs of consensus going forward.