SEC Group Scotland welcomes results of retentions consultation

Results of a consultation on retentions carried out by the Scottish Government (SG) earlier this year have been given an enthusiastic welcome by the Specialist Engineering Contractors’ Group Scotland.

SEC Group Scotland welcomes results of retentions consultation

The trade body’s analysis of the results revealed that 77% of the respondents said that the late release of retentions is a very significant/fairly significant issue, with 82% stating non-payment of retentions was a very/fairly significant issue. Two-thirds of respondents (66%) were in favour of a retentions deposit scheme or trust fund to protect the monies.

In addition, the total median estimated cost of pursuing late release of (and unpaid) retentions was found to be £2,500 per respondent.

The overwhelming majority of the respondents agreed that the practice of retentions has been associated with considerable abuse to the detriment of SMEs.

SEC Group Scotland executive chairman, Ken Lewandowski, said the results endorsed SEC Group’s long-standing campaign for reform.

He added: “The priority is to get on with legislative reform. It is now seven years since I, together with Robin Crawford, recommended to the Scottish Government (as part of SG’s review of public sector construction procurement in Scotland) that retentions should be protected.”

SEC Group Scotland chairman, Gordon Matheson, re-enforced the need for urgent action: “Small firms in the industry in Scotland are suffering unprecedented levels of cashflow difficulties as a result of COVID-19. Now is the time for expedited action to curb the abuse associated with this practice.”

The Scottish Government is setting up a working group to progress matters but Alan Wilson, SEC Group Scotland’s national executive officer, said that this should be a task and finish group with a clear deadline for reporting back to Scottish Government.

He added: “For the last three years we have been working on a solution to help inform a statutory retentions deposit scheme. This work has been carried out in conjunction with insurers, banking experts, software developers and academia. Over the fullness of time we expect that putting retentions out of reach of the abusers will help end the practice and, in the meantime, we can develop an insurance solution for clients.”

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