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Construction Payment Consultations (Publication)

Volume 630: debated on Tuesday 24 October 2017

My noble Friend the Parliamentary Under-Secretary of State for the Department for Business, Energy & Industrial Strategy (Lord Prior of Brampton) has today made the following statement:

Today we are publishing two consultations on payment practices within the construction sector. In publishing these consultations, the Department is delivering two commitments.

The first is to undertake a non-statutory post implementation review of the 2011 changes to part 2 of the Housing Grants, Construction and Regeneration Act 1996 (the “Construction Act”). The consultation will gather evidence on the effectiveness of the 2011 changes, the framework of rules created by the amended Act, the affordability of these changes for business, relevance and misuse of adjudication.

The second is to complete a review of the practice of cash retention under construction contracts. The review, of which the consultation is a part, is being published alongside independent research carried out by Pye Tait Consulting. The research draws a number of conclusions and also identifies areas for further investigation, which the consultation will seek to gather evidence on.

The consultations run in parallel, with a response period of 12 weeks, closing on the 19 January 2018.

Prompt and fair payment has long been an issue in the construction industry and many consider that some practices can be a barrier to investment, productivity improvement and growth in the sector. Both consultations and supporting documentation will be used to assess the extent of the issues; and whether and what further intervention is needed.