17 October 2019

Build UK Publishes Public Sector Retention Policies

Build UK has reached the latest milestone on its Roadmap to Zero Retentions by publishing the retention policies of major public sector clients that procure construction services.

Obtained by Build UK directly from each public sector client, this information brings much-needed transparency to the construction sector by enabling the supply chain to understand whether to expect cash retentions in contracts on projects procured by Government departments, ministries, agencies and public bodies. It includes the retention percentage generally included in contracts between the client and its Tier 1 contractors, as well as when the money should be released.

A number of public sector clients have a policy of generally not withholding retention, including High Speed 2, Highways England and Network Rail. However, there are significant complexities in the various policies, including exceptions that exist for certain types of project and the use of retention bonds. Details can be found on the Build UK website.

Build UK’s Roadmap to Zero Retentions sets out specific actions in a phased approach for the construction industry to achieve zero retentions. Going forward, Build UK aims to include information on private sector clients, seek commitment from key clients to implement the Minimum Standards on Retentions published earlier this year, and develop alternatives to retentions.

 Jo Fautley, Deputy Chief Executive of Build UK, said:

 It is encouraging to see that some public sector clients do not hold cash retentions. The practice has proven problematic for all parties in the supply chain and increased transparency is an important step towards a more successful construction industry. There is still work to be done and Build UK has set out exactly what needs to happen in its Roadmap to Zero Retentions.

Stephen Blakey, Commercial Projects Director at Network Rail, said:

 In 2011 Network Rail committed to abolish retentions from its capital works contracts and in collaboration with our supply chain has been driving industry change to deliver on that commitment. Building on the success of our Fair Payment Charter, new Supplier Protection clauses are now part of the standard terms and conditions for our capital works contracts. These conditions specifically bar the use of retentions in the supply chain.