Construction Industry: Retention Payments

Lord McColl of Dulwich Excerpts

Thursday 14th January 2021 Lords Chamber

[Lord Callanan (Con)]

I know that the noble Lord has been active for many years on this important issue. This has been a slower process than we might have liked, in part due to the complexity of the issues associated with the practice of cash retentions and the wide range of interested parties. While most in the construction industry favour or could accept change, unfortunately no consensus on a preferred solution has emerged from industry to date.

[Lord McColl of Dulwich (Con) [V]]

My Lords, what happened to the suggestion in the Murray review of 2017 that retention payments for subcontractors and vendors on major projects should be held in a designated trust account? As far as retention payments are concerned, will it help to develop the system of financial rewards for those who settle accounts earlier?

[Lord Callanan (Con)]

That is indeed one of the policy suggestions we are looking at, but given the complexity of the policy issues, it is premature to commit to the introduction of a retention deposit scheme. We will continue to seek consensus and work with industry to find a way forward.