The following is a proposal for a Member Bill tabled during the Sixth Senedd:
Proposing Member:
Title of the proposed Bill:
Protection of Construction Retention Monies (Wales) Bill
Policy Objectives of the proposed Bill:
An Act of the Welsh Parliament to provide for the protection of retention monies in the construction industry in Wales.
The aim of this Bill is to support SMEs in the Welsh construction by ensuring that their retentions monies are kept safe and not lost if a company within the supply change goes into insolvency.
The monies held in a government backed deposit scheme will legally remain to the firms from whom they are withheld but are kept back as security for contractual performance.
In 2019 Dawnus Construction, whose turnover was mainly obtained on public sector works, went into insolvency. SMEs in Dawnus’ supply chain lost between £2m and £3m of retention monies.
Aims of the Bill
- Welsh Ministers must by regulations made by statutory instrument make arrangements for securing that one or more retention deposit scheme is available for the purpose of safeguarding any cash retention withheld in connection with construction contracts.
- This Bill will place a statutory duty on parties withholding cash retentions under a construction contract to deposit them in a retention deposit scheme(s) authorised by the Welsh Government.
- Failure to place retention monies in a scheme will mean that any contractual right to deduct them is of no effect, and any retention monies withheld must be refunded in full.