Retentions are ‘worthless’

The client is in talks to drop the use of the controversial practice on its upcoming £3bn Thameslink scheme. Bill Meehan, head of contracts and procurement for the upcoming Thameslink scheme, said: “We are seriously looking at this.”

Speaking last week at a seminar on the new suite of JCT contracts, held by QS Cyril Sweett, Meehan described retentions as “a worthless mechanism”. Meehan said: “When you get to a stage where you compare offset costs against money held there is never enough money there. They (retentions) just complicate the whole process. There has to be a purpose to holding the cash – if there isn’t a purpose there’s not much use in having it.”

Network Rail, which spends around £4bn a year on construction and maintenance, would follow the lead of other big name clients such as the John Lewis Partnership, BAA, Tesco and Slough Estates by ending the use of retentions.

Fit-out contractor Overbury also stopped the process of withholding cash from subcontractors in 2002. Specialist contractors groups have long campaigned to outlaw the use of the process claiming that getting rid of them would improve trust and motivation in the supply chain.