High profile clients backing the policy include Crossrail head of procurement Martin Rowark and Stanhope director Peter Rogers.
The NSCC No Retention Policy, which has the support of NSCC’s 32 member organisations, is aiming to eliminate cash retentions by providing specialist contractors with the support they need to resist retentions. NSCC wants more clients to follow the lead of Crossrail and Stanhope. Stanhope removed retentions from its contracts 20 years ago when it recognised that there was considerable disadvantage to its suppliers. Mr Rogers explained: “The passage of time has strengthened the case for our policy, having both improved the relationships with suppliers and removed the risk of abuse.”
Crossrail, the biggest infrastructure project in the UK, has confirmed that its policy is not to include cash retention in its contracts and it does not expect cash retention to be withheld from the supply chain. Project bank accounts will be used on Crossrail projects to increase transparency and make sure that cash retention is not imposed on the supply chain. By taking steps to create a more efficient and trusting environment in which to work, Crossrail is demonstrating that there is no longer a need for retentions in the construction industry and NSCC wants other major clients to follow suit.
The NSCC No Retention Policy, adopted by NSCC members on 1 January 2011, states:
NSCC believes that the withholding of retention is an outdated practice which is unnecessary in the modern construction industry. The best guarantee of quality lies in the choice of a competent and qualified supply chain and NSCC Specialist Contractors are committed to seeking to attain the highest applicable standards in health and safety, training and technical performance. NSCC recommends that, whilst its Specialist Contractors are free to negotiate their own respective contractual terms, they do not accept cash retentions. The NSCC reception (15 February) was supported by Bibby Financial Services, Creditlook, and Surety & Bond. It showcased the new Fair Payment Campaign website, which guidance on how to implement a ‘no retention’ policy.
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