The government’s newly announced ban on retentions has been a long time in the making. It was October 2017, nearly a decade ago, when the report Retentions in the Construction Industry was published by the Department for Business, Energy and Industrial Strategy (as it was then). Even as far back as 2015, it was calculated that between £3.2bn and £5.9bn was held in retentions across the construction sector in England over the course of a year. The Construction Leadership Council has been calling for this ban since 2019.

The statistics from the 2017 BEIS report put the economic consequences of retentions in stark relief. For the three-year period studied in the report, 44% of contractors had lost retentions due to upstream insolvencies; 71% of contractors experienced delays in receiving retentions back; and the average delay for recovering retentions was significantly longer for tier 2 and 3 contractors compared with tier 1 contractors. This was before the insolvency of Carillion resulted in a domino effect felt all the way down their supply chain.

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