Agenda for change endorsed by construction minister Nigel Griffiths and chief secretary to Treasury Paul Boateng
The government has given the go-ahead for the creation of a taskforce to stamp out the use of retention payments in the public sector.

Industry leaders and MP Claire Curtis-Thomas met senior figures from the No 10 Downing Street policy unit last week. They were told the government would in principle support the formation of such a group.

Rudi Klein, chief executive of Specialist Engineering Contractors Group, said he was delighted that the government had recognised that the public sector must do more to tackle poor payment practices.

He said: "It was indicated to us that we need someone in government to act as our champion on this issue. We believe that construction minister Nigel Griffiths is already our champion and will continue to be so."

After the meeting Curtis Thomas sent a letter to Geoffrey Norris, a senior civil servant at the policy unit, setting out how the taskforce could tackle the issues. The proposals set out in this letter have been supported in principle by Griffiths and Treasury minister Paul Boateng.

The Curtis-Thomas letter says that the retentions taskforce ought to:

  • Monitor progress in removing retentions on government projects and overcome obstacles.

  • Support the Office of Government Commerce in its attempt to reach a target of defect-free construction on 70% of projects by next year.

  • Promote alternative mechanisms for government projects that reinforce team working arrangements while enhancing payment security and avoiding the need for retentions (for instance, through project bank accounts).

  • Put in place measures to provide small and medium-sized firms with greater protection from the insolvencies of upstream payers and to help reduce retention abuse.

In the letter, which has been seen by 好色先生TV, Curtis-Thomas said the policy unit had offered to write to the Office of Government Commerce and the Department of Health telling them about this development.

Curtis-Thomas said other issues discussed at the meeting included the lack of security of payment for smaller firms in construction. It was noted that this was a major obstacle to improving their productivity and profitability, a key government aim.

Other items that came up included the consequences of poor payments. Some speakers noted that reputable firms found it difficult to retain skilled operatives, engineers and managers if they were continually faced by these problems.