May 2024

NFRC Roofing Talk
AN UPDATE ON CASH RETENTIONS
James Talman, NFRC CEO, talks through the progress being made around cash retentions
and poor payment practices...
When Matt Downs, the Editor of Total
Contractor, asked if we could give any
updates on guidance around dealing with
poor payment practices and retentions, I checked
back through previous Total Contractor editions
which covered the NFRC’s concerted push on
retentions in last August’s edition, and the
challenge regarding poor payment practices looking
at the year ahead in the February 2024 edition.
So, let us start with retentions, which readers may
know is the single biggest issue that NFRC
Members would like to see eradicated. Since our
event at the House of Commons last year we have
had several meetings with supportive MPs and
Peers regarding the abolishment of retentions. We
have continued to provide evidence through our
member surveys of the issue’s debilitating impact.
This has included a meeting in January between our
supporting MP Andrew Lewer MBE, and Minister
Kevin Hollinrake MP (then Under Secretary of State,
now Minister of State in the Department for
Business and Trade), amid the Minister’s busy
schedule dealing with the sub postmasters Horizon
scandal. The minister acknowledged that action
was needed, and we await to see in what form
regulations follow.
Aside from tackling the issue at Westminster, we
continue to work collaboratively with the Construction
Leadership Council (CLC) and Build UK to recognise
that retention is an outmoded instrument in the
roofing sector. The CLC are clear in their ambition to
end retention but place caveats to this achievement.
One example is the concern of no other surety in
place. The roofing market is dictated by the
requirement to provide material and installation
warranties providing this surety on completion.
As previously stated, we need in our sector to
remove the misnomer amongst clients and tier one
contractors that retention is linked to quality. Aside
from warranties, all roofing contractors will – and
Above: James Talman, CEO of NFRC.
are – seeing higher demands on
proof of competency along with
great scrutiny of projects. This is
reflected in NFRC’s support of its
members alongside the
requirements for contractors
registered to NFRC CPS competent
persons scheme, the latter now under the direct
authority of the HSE. At a recent meeting involving
senior procurement executives from tier one
contractors, it was clear that they were receptive to
the need to recognise this commitment by NFRC,
and its members, to invest in skills development
alongside competency scrutiny, and we look forward
to further constructive dialogue; to repeat our
rallying call: allow our members to invest in their
businesses through retaining skills not holding their
cash.
Late payment ‘plague’
Alongside retentions, late payment continues to
plague the industry and is a key concern amongst
our members. Less than a third of respondents to
our year-end survey stated they were paid within
thirty-day terms and the figures were only slightly
better for those on longer terms. This has been a
consistent trend ever since we started our surveys.
We are supportive of the Government’s statutory
reporting duty on Business Payment Practices
enabling one to check when large businesses pay
their suppliers, and its impending update, along
with the associated construction sector payment
performance tables published by Build UK. However
Above: MP Andrew Lewer (left) with Kevin
Hollinrake MP, Minister of State in the
Department for Business and Trade.
these measures are not, on the face of it, improving
the fortunes of the majority of our members. The
knock-on impact for SME’s, micro businesses and
the self-employed is too often ignored in favour of
others who are a strategic
risk to a large organisation
if not paid within terms.
We will continue to work
across the construction
sector to tackle late
payment and support NFRC
members where there is
clear evidence of noncontestable
delay.
Lord Fox LD made a very valid observation during a
recent debate in the House of Lords on late
payments and the reporting duties, stating: ‘My
Lords, finally – I am not to be outdone – the
Minister sets a lot of store on the public
embarrassment issue. I come back to the balance
of jeopardy: the Minister is a businessman of the
world and he knows that, if you have a publicly
listed company, it can make sure it reaches its
numbers by the end of the year by extending its
outgoings into the following year – it happens all
the time. Which is more embarrassing to the board?
not meeting its financial projections to the Stock
Exchange or having a dirty note in its annual report
12 months later?’
Until and unless a future government tightens
payment regulations, the message is clear – be
unequivocal on your payment terms, report flagrant
avoidance to your trade body and make sure the
‘dirty note’ is not in your annual accounts.
Contact NFRC
020 7638 7663
www.nfrc.co.uk
NFRC
12 TC MAY 2024