Withholding retentions across the supply chain has been an outdated practice which disproportionally impacts the cashflow of small businesses across the construction. Actuate UK and its members will now widely consult and submit a response supporting a solution that is fair, enforceable and sustainable.
The consultation is part of economy-wide policy and legislative commitments to tackle late payments and support small businesses to thrive as agents of growth. Government recognizes that SMEs play an essential role in UK economy and support a skilled, competent workforce that will deliver housing and infrastructure projects and support net zero targets. 99% of construction companies are SMEs and poor cashflow is a major concern; construction still holds the unfortunate first as the sector of the UK’s economy with more reported insolvencies.
The consultation will run till 23rd October 2025 and can be access here.
Rob Driscoll, ECA Director of Legal & Business, commented on behalf of Actuate UK’s Business Group:
“Finally, Government is consulting on how best to reconcile unfair and delayed payment practices. In recognition of the need to ‘go further, faster’, Government’s engagement on how to reform retentions marks a seminal once-in-a-generation moment for the industry to come together and shape reform in an area which has stifled growth, innovation and training, crippling supply-chain cash-flow and amplifying the repercussions of insolvency for over a century.
Let’s hope industry can come together, give clients the comfort they need and suppliers the protect they need, in order to make our industry more resilient to deliver the UK’s built environment.”
Debbie Petford BESA's director of legal and member of the Actuate UK Business Group stressed the importance of this consultation:
“This policy announcement and consultation confirms that the Government understands the need for reform for late payments and cash retentions and that the industry should address the necessary culture and legislative change.
We want to encourage companies across the engineering services to take part and support solutions that ensure a future business environment in which they can thrive and not just survive.”
