Retention Free by 2023?

Build UK, which supports the abolition of retentions in construction contracts, has developed a roadmap to achieve zero retentions by 2023.

The roadmap includes a minimum standards document, which contains provisions requiring that sub-contract retentions are no more onerous than those in the main contract, and the removal of retentions in all contracts (at any tier) where the starting value is less than £50,000 (raising to £100,000 from 2021).

They have also provided suggested drafting for incorporating these principles into JCT and NEC contracts.

It seems likely that these provisions will be used in some contracts and could pave the way to the construction industry becoming retention free. Whilst many employers favour the use of retentions, we are already seeing some move away from retentions. For example, we have recently seen one heavyweight employer decide that the possibility of missing out on its future construction work, alongside the use of bonds and/or parent company guarantees, is enough of an incentive for contractors, without any need to hold retention.

Link to the documents: https://builduk.org/priorities/improving-business-performance/retentions/

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