§ Mr. Hilary BennTo ask the Secretary of State for the Environment, Transport and the Regions if he will issue guidance to local authorities on the phasing out of the retention system in respect of new contracts for construction work; and if he will make a statement. [155264]
§ Mr. SymsTo ask the Secretary of State for the Environment, Transport and the Regions what plans he has to abolish cash retentions in the construction industry; and if he will make a statement. [155297]
§ Mr. RaynsfordI do not think it appropriate to consider abolishing retentions, or to demand that central or local government clients no longer use them. Retentions are symptomatic of a lack of trust between clients, contractors and sub-contractors that is common in construction. This goes to the heart of the issues raised by the Construction Task Force in its report, "Rethinking Construction".
There are significant signs of a shift in the construction industry towards a more co-operative, and collaborative approach. If clients and suppliers can build a culture of trust throughout the supply chain, this may lead to a corresponding change in practice on retentions.
Leading central Government construction clients are moving towards performance based partnering contracts encouraged by revised guidance on procurement from the Office of Government Commerce which should reduce the need for retentions in future.
The Local Government Task Force which was formed to promote "Rethinking Construction" in local government, has concluded that retentions are not compatible with collaborative approaches such as partnering. The Task Force will encourage authorities to replace retentions with robust quality control assurance systems.