{"id":74611,"date":"2020-04-08T08:02:30","date_gmt":"2020-04-08T07:02:30","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=74611"},"modified":"2020-04-08T08:02:30","modified_gmt":"2020-04-08T07:02:30","slug":"retention-money-contractors","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/retention-money-contractors\/74611\/","title":{"rendered":"Clients must release \u00a34.5bn retention money to contractors, urges BESA"},"content":{"rendered":"<h2>Construction clients must release \u00a34.5bn retention money currently being withheld from contractors, urges the <a href=\"https:\/\/www.thebesa.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Building Engineering Services Association<\/a> (BESA)<\/h2>\n<p>The BESA has supported a plea to Government to instruct construction clients to release \u00a34.5bn currently being withheld from contractors in the form or retention payments.<\/p>\n<p>BESA supported the request, which was included in a <a href=\"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/protect-construction\/74244\/\" target=\"_blank\" rel=\"noopener noreferrer\">letter to the prime minister<\/a> from the Construction Leadership Council (CLC), in a bid to inject much-needed money into struggling construction supply chains.<\/p>\n<p>As well as the call to release retentions, the CLC also asked the government to consider suspending PAYE and CIS tax due to HMRC in April and May for construction and consultancy firms and workers, with no financial penalty. This would also help to relieve some of the immediate cash flow challenges being experienced across the sector, it said.<\/p>\n<p>It has also called for all <a href=\"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/levy-collection-suspended\/73950\/\" target=\"_blank\" rel=\"noopener noreferrer\">Apprenticeship Levy payments<\/a> to be cancelled for the duration of the COVID-19 crisis.<\/p>\n<p>BESA, which has been campaigning for reform of retention payments for more than two decades, added that speed was now of the essence as many specialist contractors were facing a rapid fall in turnover this month.<\/p>\n<p>An online poll held during BESA\u2019s daily <a href=\"https:\/\/www.pbctoday.co.uk\/news\/covid-19-construction-news\/\" target=\"_blank\" rel=\"noopener noreferrer\">COVID-19<\/a> update webinar revealed that 58% of firms who responded expect to invoice for just 25% or less of their usual monthly amounts at the end of April.<\/p>\n<h3>\u2018Cash is king\u2019 in construction<\/h3>\n<p>BESA chief executive David Frise, said: \u201cThe current crisis has provided a sharp reminder that cash is king in this industry.<\/p>\n<p>\u201cAny measures that can get cash flowing more rapidly through supply chains will be crucial to ensure our sector can keep delivering on its promise to support essential services with vital building services.\u201d<\/p>\n<p>Since the CLC letter arrived at 10 Downing Street, the Crown Commercial Service has updated its Procurement Policy Note 2\/20\u00a0\u2018Supplier relief due to COVID-19\u2019 to suggest ways that public sector clients could improve cash flow through their supply chains.<\/p>\n<p>It outlines the release of retention money could be considered, but warned that it might expose clients to \u201cinappropriate risks\u201d. It does, however, encourage clients to set up \u2018Project Bank Accounts\u2019 and says they should pay suppliers promptly.<strong>\u00a0<\/strong><\/p>\n<p>The CLC letter pointed out that the cash retentions routinely held against contractors can represent up to 5% of each regular payment. It acknowledged there would be some \u201cstrong opinions over this\u201d, but were the government to direct all public sector bodies to release all retention monies held \u201cthis would inject cash at all levels of the construction supply chain\u201d.<\/p>\n<p>\u201cThe construction industry also needs clear support and recognition from the government for the essential work that it is doing, and the role it is playing in supporting public services and keeping the economy functioning,\u201d the letter added.<\/p>\n<h3>Greater sympathy for SMEs<\/h3>\n<p>BESA also urged banks to show greater sympathy to <a href=\"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/construction-smes-coronavirus\/74251\/\" target=\"_blank\" rel=\"noopener noreferrer\">SME firms<\/a> working across construction as they were finding it hard to access business loans despite striving to keep sites operating.<\/p>\n<p>Another BESA poll revealed that 97% of firms who had applied for Coronavirus Business Interruption Loans (CBILs) were still waiting for a response. \u201cThis goes to show that the process has yet to catch up with the demand,\u201d said Frise.<\/p>\n<p>The Association\u2019s daily webinar also heard that the <a href=\"https:\/\/www.cbi.org.uk\/\" target=\"_blank\" rel=\"noopener noreferrer\">CBI <\/a>had issued an upbeat assessment of the UK\u2019s medium-term economic prospects. It is predicting a V-shaped recession \u2013 a steep decline followed by a rapid recovery in the second half of the year. It does not envisage a long haul recovery like the one that followed the financial crash of 2008\/9.<\/p>\n<p>CBI also believes there are a number of long-term benefits on the horizon including rapid growth in digital working as a result of more people being forced to work this way during the COVID-19 outbreak and a boost to plans to decarbonise the economy thanks to many lessons learned during the crisis.<\/p>\n<div class=\"mk-custom-module-container\">\n<\/div>","protected":false},"excerpt":{"rendered":"<p>Construction clients must release \u00a34.5bn retention money currently being withheld from contractors, urges the Building Engineering Services Association (BESA).<\/p>\n","protected":false},"author":16,"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":[712,676,54592,283,276,18288],"stakeholder_rel_tag":[],"contributor_rel_tag":[],"class_list":{"0":"post-74611","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-planning-construction-news","7":"tag-besa","8":"tag-construction","9":"tag-coronavirus","10":"tag-finance","11":"tag-government","12":"tag-hmrc"},"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>Clients must release \u00a34.5bn retention money to contractors, urges BESA<\/title>\n<meta name=\"description\" content=\"Construction clients must release \u00a34.5bn retention money currently being withheld from contractors, urges the Building Engineering Services Association\" \/>\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\/retention-money-contractors\/74611\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Clients must release \u00a34.5bn retention money to contractors, urges BESA\" \/>\n<meta property=\"og:description\" content=\"Construction clients must release \u00a34.5bn retention money currently being withheld from contractors, urges the Building Engineering Services Association (BESA)\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/retention-money-contractors\/74611\/\" \/>\n<meta property=\"og:site_name\" content=\"Planning, Building &amp; 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