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Engineering services alliance, Actuate UK, has welcomed recommendations to the Scottish Government to reform the outdated practice of cash retentions and protect sub-contractors from payment abuse and upstream insolvencies.
The report from the Short Life Working Group on Retentions in Construction Contracts makes a range of recommendations to improve the payment conditions in both the public and private sector while acknowledging that there is not at present widespread support in Scotland for full abolition of cash retentions.
The recommendations include legislation to establish a statutory custodial Retention Deposit Scheme; Scottish Government to issue a retention best practice policy note and proceed to greater transparency and drive compliance on the retention practices for public sector contracts.
The Group also asks Scottish Government to reference retentions and fair payment within the Construction Accord and monitor the situation to promote best practice in collaboration with industry. Moreover, work should continue to consider and implement removal of retentions from contracts as demonstrated by Network Rail.
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