Colin Harding and fellow travellers should remember one important fact before attempting to have retentions outlawed: contractors usually get paid 95% or 97% of work done to date in advance of completion, once a month.
Not a bad deal and one that allows most contractors to make extra money out of well-managed cash flows.
Contractors should get their performance to an adequate level before advocating the removal of retentions. Most are poor at completing all work properly before completion and at remedying the defects that appear afterwards – if this weren’t the case, the industry wouldn’t need a key performance indicator on the subject.
It is difficult enough to get satisfactory remedial work carried out even when a retention is held, but at least employers have the comfort of a contribution towards the cost if they are obliged to employ others to resolve defects.
If any firm has problems getting paid, it should ensure the requirements of the contract are met and get the company’s credit control measures in order. If you want to avoid outstanding retentions, get your own house in order.
Roger Thrush, Wetherby