A consultation on the practice of cash retention under construction contracts

Overview

The purpose of this consultation is to seek information on the practice of cash retention under construction contracts and gather views on the findings of the supporting documentation.

The consultation is relevant to any party to a commercial construction contract as defined by the construction contracts legislation. It is also relevant to adjudicators, arbitrators and lawyers. While this consultation concerns construction specific legislation it may also be relevant for those with an interest in prompt payment more generally and to insolvency practitioners. The legislation does not apply to residential occupiers.

The research report and Consultation Stage Impact Assessment are published alongside this consultation.

The consultation runs in parallel with one supporting the Post Implementation Review of the 2011 changes to Part 2 of the Housing Grants, Construction and Regeneration Act 1996.

What happens next

The responses and wider stakeholder engagement that took place during the consultation period illustrate the breadth of views within the sector on the practice of cash retentions, given the nature and complexity of the construction supply chain and the range of possible policy solutions.

We will continue to work with the construction industry and its clients to achieve a consensus on how to resolve the problems associated with cash retentions.

We have published a summary of the responses to this consultation on GOV.UK.