Retention payments in the construction sector
Retention payments in the construction sector
The
Finance Committee and the Economy, Infrastructure and Skills
Committee undertook a joint inquiry into retention payments in the
construction industry.
The
retention system has featured in the construction sector for over 100 years and
is a contractual practice originally introduced to provide security against
defective work or the insolvency of construction firms.
Most
building contracts and sub-contracts entitle the employing party or client or a
contractor to keep a percentage, typically around 5%, of the value of the work
carried out until completion or making good of defects.
Research
by the UK Government showed that unjustified late and non-payment of
retention monies was a significant issue for some contractors. The research
also showed that delays in paying retentions become more significant further
down the supply chain.
The
Committees examined the use of retentions in Wales, and the UK more widely. The
inquiry considered the following:
- to what extent retentions are an issue
for companies based and/or operating in Wales, including how issues might
differ through the supply chain;
- whether there are any benefits to the
use of retentions;
- alternatives to the use of retentions
and what role the Welsh Government could play in developing and delivering
those alternatives.
Following
the evidence session the committees jointly wrote
to the Minister for Economy, Transport and North Wales
Letter
from the Minister for Economy, Transport and North Wales
Evidence Session |
Date, Agenda and Minutes |
Transcript |
Video |
1.
Professor Rudi Klein, Barrister, Head of Specialist Engineering
Contractors’ (SEC)
Group Catherine
Griffith-Williams, National Executive Officer for Wales, SEC Group Kyle
Spiller MCIOB, Director of SAM Drylining Ltd
(representing Chartered Institute
of Building Wales) Ifan Glyn, Senior Hub Director/Wales Director,
Federation Of Master Builders |
Business type: Committee Inquiry
Status: Complete
First published: 01/10/2019
Documents
- Responses
- RP 01 SEC Group PDF 2 MB
- RP 02 Scottish Futures Trust PDF 1 MB
- RP 03 Federation of Master Builders (FMB) PDF 403 KB
- RP 04 Individual 1 PDF 1 MB
- RP 05 Scottish Government PDF 1 MB
- RP 06 Individual 2 PDF 633 KB
- RP 07 NHS Wales Shared Services Partnership PDF 402 KB
- Letter to the Minister for Economy, Transport and North Wales - 4 March 2020 PDF 422 KB
- Letter from the Minister for Economy, Transport and North Wales PDF 241 KB