{"id":68970,"date":"2019-12-10T08:24:39","date_gmt":"2019-12-10T08:24:39","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=68970"},"modified":"2019-12-11T08:12:02","modified_gmt":"2019-12-11T08:12:02","slug":"build-uk-retentions-roadmap","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/build-uk-retentions-roadmap\/68970\/","title":{"rendered":"CLC endorses zero retentions in construction by 2023"},"content":{"rendered":"<h2 class=\"p1\"><span class=\"s1\">The <a href=\"http:\/\/www.constructionleadershipcouncil.co.uk\/\" target=\"_blank\" rel=\"noopener noreferrer\">Construction Leadership Council<\/a> (CLC) has endorsed <a href=\"https:\/\/builduk.org\/\" target=\"_blank\" rel=\"noopener noreferrer\">Build UK&#8217;s<\/a> Roadmap to Zero Retentions, which proposes moving towards the objective of zero retentions in construction by 2023<\/span><\/h2>\n<p class=\"p1\"><span class=\"s1\">This CLC&#8217;s endorsement of the Build UK Roadmap to Zero Retentions is a means of improving the transparency and <a href=\"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/wrong-with-retention\/52757\/\" target=\"_blank\" rel=\"noopener noreferrer\">fairness of payment practices<\/a> in relation to retentions <\/span><span class=\"s1\">in construction<\/span><span class=\"s1\">. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">This will build upon the existing CLC policy, as set out in the 2014 Construction Supply Chain Payment Charter, that the industry should work towards the abolition of cash retentions.<\/span><\/p>\n<h3><span class=\"s1\">Roadmap to zero retentions <\/span><\/h3>\n<p class=\"p1\"><span class=\"s1\">The roadmap stated that firms should either not withhold cash retentions, or ensure that the provisions relating to retentions are no more onerous than those included in the contract between the client and Tier 1 contractor. In addition, the Payment Charter set the objective of moving to <\/span><span class=\"s1\">zero cash retentions by 2025.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Within the industry and amongst its clients, views are divided as to whether these are an effective and cost-efficient means of providing surety against defects, or whether these are an outdated <\/span><span class=\"s1\">practice, that increases <a href=\"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/late-payment-issues-solving\/68682\/\" target=\"_blank\" rel=\"noopener noreferrer\">cash flow pressure<\/a> on firms in the supply chain and should have no <\/span><span class=\"s1\">place in a modern construction industry. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">The loss of an estimated \u00a3223m of retention payments each year due to insolvency alone, also has an impact on industry cash flow, funds for investment and profitability.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">Whilst there is no clear consensus on the part of the industry as to what should replace <\/span><span class=\"s1\">retentions, there is a clear majority that believes the current situation is unsustainable and <\/span><span class=\"s1\">requires reform.\u00a0<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">The CLC believes that this approach will enable the industry to make progress towards the <\/span><span class=\"s1\">objective of achieving zero cash retentions by 2025, whilst also allowing the industry and its <\/span><span class=\"s1\">clients time to adapt, to minimise the impact on cash flow, to put in place alternative surety <\/span><span class=\"s1\">arrangements, and to improve standards of quality within the industry.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">The retentions roadmap proposes a phased approach to moving towards the objective of zero <\/span><span class=\"s1\">retentions by 2023, and no later than 2025. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">The roadmap includes key milestones, including <\/span><span class=\"s1\">publication of retention policies by public and private sector clients, and the introduction and <\/span><span class=\"s1\">adoption of the Build UK Minimum Standards on retentions, which incorporate and build on the <\/span><span class=\"s1\">Payment Charter commitments. <\/span><\/p>\n<h3 class=\"p1\"><span class=\"s1\">These standards include:<\/span><\/h3>\n<ul>\n<li class=\"p1\"><span class=\"s1\">Ensuring that any arrangements for retention are no more onerous than those <\/span><span class=\"s1\">implemented in the main contract, actively ensuring that retention arrangements are <\/span><span class=\"s1\">filtered down<\/span><\/li>\n<li class=\"p1\"><span class=\"s1\">Only deducting retentions in relation to permanent works, excluding temporary and\/or <\/span><span class=\"s1\">preliminary works<\/span><\/li>\n<li class=\"p1\"><span class=\"s1\">Deducting retentions as a single sum towards the end of the contract to act as surety, <\/span><span class=\"s1\">not from interim payments prior to the completion of work, which have an impact on <\/span><span class=\"s1\">cash flow within the supply chain<\/span><\/li>\n<li class=\"p1\"><span class=\"s1\">Not withholding more than 1.5% of contract value, reducing to 1% from 2021; and<\/span><\/li>\n<li class=\"p1\"><span class=\"s1\">Ensuring that the release of retentions under sub-contracts is not linked to the release <\/span><span class=\"s1\">of retentions under the main contract, compliant with the 2011 Amendment to the <\/span><span class=\"s1\">Housing Grants, Regeneration &amp; Construction Act.<\/span><\/li>\n<\/ul>\n<div class=\"mk-custom-module-container\">\n<\/div>","protected":false},"excerpt":{"rendered":"<p>The Construction Leadership Council (CLC) has endorsed Build UK&#8217;s Roadmap to Zero Retentions, which proposes moving towards the objective of zero retentions in construction by 2023.<\/p>\n","protected":false},"author":20,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[304],"tags":[676,908,283,276,621,701],"stakeholder_rel_tag":[],"contributor_rel_tag":[],"class_list":{"0":"post-68970","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-planning-construction-news","7":"tag-construction","8":"tag-economy","9":"tag-finance","10":"tag-government","11":"tag-sme","12":"tag-supply-chain"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v26.9) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>CLC endorses zero retentions in construction by 2023<\/title>\n<meta name=\"description\" content=\"The CLC is endorsing the Build UK Roadmap to Zero Retentions, which has been developed and is supported by the clients, construction firms and associations\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/build-uk-retentions-roadmap\/68970\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"CLC endorses zero retentions in construction by 2023\" \/>\n<meta property=\"og:description\" content=\"The CLC is endorsing the Build UK Roadmap to Zero Retentions, which has been developed and is supported by the clients, construction firms and associations\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/build-uk-retentions-roadmap\/68970\/\" \/>\n<meta property=\"og:site_name\" content=\"Planning, Building &amp; 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