Retentions - appetite for reform

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David Christie considers whether outlawing retentions is the best answer to payment practice issues

Following the government’s consultations over the winter and the growing support for Peter Aldous MP’s ten-minute rule bill on retentions, the appetite for reform in this (and other) areas of payment practice is clear.

The details of the mechanism that might be adopted in any retentions reform are not really discussed in the government’s consultation paper. A possible move to a retention deposit scheme is, however, mooted in the consultation and seems to be the focus of Aldous’ bill. With apologies to Sir Humphrey Appleby, it seems that if it is considered that “something must be done” about retentions, then it looks likely that retention deposits will be the “something” that must be done.

This is hopefully not unduly cynical: there is surely scope to build on the existing use of retentions. So – as part of an initial thinking through of some issues that might arise in that process, it is worth considering which problems the deposit retention scheme might solve, and what further issues it might create. 

The consultation paper and the supporting report by Pye Tait indicates that there are four features of a retention. Two of these are additional benefits to the employer and two are burdens or risks for the contractor. 

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