The government has started a consultation on cash retention. This follows publication of a government commissioned government research paper, which identified key issues:

• loss of retention monies due to contractor insolvency;

• construction customers, despite the 2011 Construction Act changes, making payment of retention conditional on the performance of obligations under another contract;

• unjustified late and non-payment of retention monies; and

• the suitability and feasibility of wide use of alternative mechanisms to retentions.

The consultation, which closes on 19 January 2018, seeks views and information on:

• the effectiveness of existing prompt and fair payment measures for retentions;

• the independent research and the BEIS Impact Assessment;

• late and non-payment of retentions;

• the appropriateness of a “cap” on retention, and the length of time it can be held;

• the effectiveness of existing alternative mechanisms; and

• the costs and benefits of holding retentions in a deposit scheme or trust account.

See: https://www.gov.uk/government/consultations/ retention-payments-in-the- construction-industry