Archives for March 2011

Cash retentions – money held back from specialist sub contractors by clients as security – have come closer to being consigned to the history books, thanks to a campaign involving the Glass & Glazing Federation.

The NSCC’s (National Specialist Contractors Council) ‘No Retention Policy’ was launched at an exclusive event in London on February 16, where more than 100 key clients heard a presentation by Martin Rowark, head of procurement at Crossrail.

The NSCC’s (National Specialist Contractors Council) ‘No Retention Policy’ was launched at an exclusive event in London on February 16, where more than 100 key clients heard a presentation by Martin Rowark, head of procurement at Crossrail.

The No Retention Policy, which has the support of NSCC’s 32 member organisations – including very active involvement by the GGF – is aiming to eliminate cash retentions by providing specialist contractors with the support they need to resist retentions.

“Many of our members find themselves in contracts where the client withholds money as a way of guaranteeing quality,” Nigel Rees, chief executive of the GGF, said. “We believe that this is an extremely outdated practice, and there are far more effective ways of working with the supply chain.

“More importantly, in an age when competition is fierce, and companies have to work to small margins, interfering with cash flow in this manner can have a devastating effect on a company’s finances.

“Therefore, we are proud to have worked alongside the NSCC in providing tools for sub contractors – including GGF members – to help them avoid having their money withheld from them.”

High profile clients such as Crossrail and Stanhope are increasingly recognising that there are better guarantees of quality than cash retention. Stanhope plc, one of the most successful development companies, removed retentions from its contracts some 20 years ago when it recognised that there was considerable disadvantage to its suppliers.

Peter Rogers, Director of Stanhope, 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.”

The NSCC reception, supported by Bibby Financial Services, Creditlook, and Surety and Bond, showcased the new Fair Payment Campaign website which has a dedicated section on retentions at www.no-retention.co.uk packed with helpful guidance and tools on how to implement a ‘no retention’ policy.

Photo caption:

“Cash retention is an extremely outdated practice” – Nigel Rees GGF