The collapse of Kent-based contractor, R Durtnell & Sons, has sparked renewed calls for the government to adopt a long-delayed bill aimed at reforming the way retentions are used in construction.
The so-called Aldous Bill, put forward by Conservative MP Peter Aldous following the collapse of Carillion last year, proposes protecting construction subcontractors by holding cash retentions in a third party account.
But a second reading of the Bill, whose advocates claim it has the support of more than half a million businesses and self-employed professionals, has been pushed back multiple times.
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Now the Specialist Engineering Contractors Group (SEC) has warned that Durtnell’s collapse provides further evidence that such a bill is needed.
SEC Group said it had examined Durtnell’s March 2019 accounts and found that retentions totalling £630,000 were owed to the company, the bulk of which would have been deducted from their supply chain payments.
It also claimed that the low level of retentions on its troubled £15m refurbishment of the Grade-I-listed Brighton Dome Corn Exchange and Studio Theatre (amounting to £10,000) suggested that Durtnell owed substantially more to its supply chain in retentions than it was owed.
And it warned that as trade credit insurers withdrew cover from many contractors, it left supply chains exposed.
Rudi Klein, the SEC Group CEO said: “While it is extremely sad to lose such a long-established firm, there is now concern for Durtnell’s sub-contractors.
“The retention monies belong to the businesses – mostly SMEs – in Durtnell’s supply chain and for the most part would have represented their profit margins. The government must now act to adopt Peter Aldous Bill, already in Parliament, that protect these monies from upstream insolvencies.”
