On January 9, 2018 Peter Aldous (MP for Waveney in East Anglia) will be introducing a Bill to ring-fence cash retentions. These are monies withheld from firm’s ostensibly as security in case they do not return to remedy non-compliant work. The monies should be released on completion of the contract. In practice the monies are used to bolster the working capital of the party withholding them.
The Bill will require that cash retentions are protected in a retention deposit scheme. David Simpson will be urging the Government to provide Parliamentary time for the Bill.
David Simpson MP said, “Recent research published by the Government suggest that the system of cash retentions is widely abused. SMEs across the UK are losing £900,000 worth of cash retentions per working day because of insolvencies up the supply chain. These monies belong to them and are not intended for distribution to creditors of insolvent businesses.”
Alfie Watterson, National Executive Officer for the Northern Ireland Specialist Engineering Contractors’ (SEC) Group, praised David Simpson for being a passionate champion of the interests of small firms in Northern Ireland.
“Almost £100million of cash retentions are outstanding at any one time in Northern Ireland. These monies are primarily funded by small firms but they are at risk of being lost. Moreover they are never released on time or at all.”
Mr Watterson added that legislation is required for these monies to be placed in a ring-fenced scheme as happens in many other countries.
The Specialist Engineering Contractors’ (SEC) Group Northern Ireland represents engineering in construction, the largest sector in the industry by value. It is an umbrella representative body comprising the sector’s premier trade associations: British Constructional Steelwork Association, ECA -‘Electrotechnical and engineering services trade body’, Building and Engineering Services Association, Lift and Escalator Industry Association, and the Scottish and Northern Ireland Plumbing Employers Federation (SNIPEF).
For further information on SEC Group Northern Ireland, contact Alfie Watterson, e-mail [email protected] or telephone 0044 (0)7971 141 911.