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Councils sitting on retention monies, say roofing contractors

NFRC chief executive James Talman

A new survey by Glenigan for the National Federation of Roofing Contractors (NFRC) reveals that just 14% of roofing contractors say they have a smooth experience gaining the retention monies that they are owed on local authority projects. For 86% there are problems.

The latest State of the Roofing Industry survey asked roofing and cladding contractors about their experiences with cash retentions, specifically when undertaking local authority works. 

More than half (51%) of respondents to the quarterly survey said they took on local authority work. Of these, 76% said that they always, usually, or sometimes had retentions held on them when undertaking those works.

Of that group, 86% said they always, usually, or sometimes had trouble obtaining the retention monies they were owed.

  • 17% said they ‘always’ had trouble
  • 33% said they ‘usually’ had trouble
  • 36% said they ‘sometimes’ had trouble.

This information was collected to support NFRC’s campaign against the abuse of retentions. 2021 research from NFRC that revealed £300m of cash was being held in retentions in the roofing industry alone.

Ongoing research from the trade body currently also indicates that roofing contractors are generally not seeing this historic practice fade out, despite industry efforts to encourage voluntary action by clients to stop holding retentions.

78% of those who have responded so far to the broad-based 2023 Member Retentions survey say that they are facing the same level or more retention as last year. Respondents called dealing with retentions ‘unnecessary’, ‘tortuous’, and even ‘psychologically damaging’.

NFRC chief executive James Talman said: “At best, retentions are an additional burden on time-poor microbusinesses. At worst, they reduce subcontractors to operating at a loss and sometimes even facing insolvency.

“Ending the use of cash retentions would encourage business investment in skills and expansion by improving construction SME cashflow, would free up hours of wasted time chasing owed monies, and could reduce the number of sub-contractor businesses that decide they just cannot carry on. This outdated practice has persisted for long enough: government, at both the national and local level, should set an example to all UK clients to end its use throughout their project supply chain.”

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