INDUSTRY LEADERS TO PRESENT ALDOUS BILL PETITION TO 10 DOWNING STREET
A petition on fair payment and retentions will be delivered to Prime Minister Theresa May later this month by Peter Aldous MP and a delegation of industry leaders. The group will take the petition to 10 Downing Street on Monday 23 April at around 1.30pm.
The group of industry leaders presenting the petition includes FSB National Chair Mike Cherry, FMB Chief Executive Brian Berry, Director General of the Institute of Directors Stephen Martin, ECA CEO Steve Bratt and BESA CEO David Frise.
BESA and ECA, who are coordinating the presentation on 23 April, are urging the industry to support the petition, which comes just four days before the second reading of the ‘Aldous Bill’ (Friday 27 April), which proposes cash retentions owed to suppliers are held in trust accounts.
FSB National Chairman Mike Cherry said: “As Carillion’s liquidation showed, smaller contractors can be hugely and unfairly hit by the collapse of a bigger firm which hired them going bust and leaving them out of pocket. It defies natural justice that a contractor which completes a job and does it well can be left exposed in this way. Withheld retentions were originally intended as security in case a firm doesn’t return to rectify non-complying work. In modern practice, they are withheld to boost the cash flow of the party withholding them. The proposal to hold retentions in trust would be a sensible way to prevent this from happening, and protect small hard-working businesses in the supply chain against a Carillion-style financial demise.”
ECA CEO Steve Bratt commented: “Putting retentions in trust is a vital first step in helping to protect the supply chain from future upstream insolvency, and it will also help to prevent the abuse of retention monies owed to the supply chain.”
“Our petition aims to raise awareness of this critical issue with the Prime Minister in advance of the Aldous Bill being heard in Parliament. We urge the entire construction industry to back the bill and show support for immediate retentions reform.”
BESA CEO David Frise said: “This represents a tremendous show of support from industry and MPs. At its best, the industry can deliver a first-class built environment, but cash retentions impact every one of the 330,000 SMEs and sole traders represented in this petition. We need reform now and the proposal to hold cash retentions in trust will be a start to demonstrate lessons have been learned from Carillion.”
Reform of unfair payment practices, including excessive withholding of retentions, is already supported by over 75 industry trade bodies, representing over 330,000 companies and self-employed professionals. Support has been given from across the entire construction supply chain, including house building, roofing, scaffolding, electrical, heating, plumbing, interiors and demolition.
Payment abuse has climbed up the political agenda since construction giant Carillion collapsed just six days after the first reading of the Aldous Bill, leaving many SMEs owed huge sums of money. Had retentions owed by Carillion to suppliers been held in trust, this money could have been recovered.