Construction calls on Government to release more than £1 billion of cash retentions

The Construction Leadership Council (CLC) has called on the Government to direct all Government bodies to release all cash retentions monies held. The move could inject more than £1 billion into the construction sector at a time when it is facing a major cashflow crisis.

The call to release retentions was part of a six point plan to sustain the industry and accelerate recovery of the economy and it was included in a letter sent to the Prime Minister.

It is estimated that throughout the construction industry there is £4.5 billion is held by clients and firms in the supply chain in the form of cash retentions. As the public sector accounts for nearly 40% of construction output and if the Government agreed to the request then around £1.8 billion could be pumped into the industry quickly.

The CLC letter said: “There will, no doubt, be some strong opinions over this, but were the Government to direct all Government bodies to release all retention monies held this would inject cash at all levels of the construction supply chain.”

According to the CLC the construction sector is already working together to respond to the impact of the coronavirus, and to ensure that it can both sustain the industry over the coming weeks and months, as well as to enable it to play a full part in the economic recovery once the coronavirus has been beaten.

The CLC has also called for clear support and recognition from the Government for the essential work that it is doing, and the role it is playing in supporting public services and keeping the economy functioning. The CLC also warned that as merchants and distributors close there is the very real prospect of many of the essential works not being able to be done, or unduly delayed, by difficulties in securing products and materials.

CLICK HERE to download the CLC letter to the Prime Minister.