The Finance Committee and the Economy, Infrastructure and Skills Committee of the National Assembly for Wales are undertaking a joint inquiry into retention payments in the construction industry. The retention system has featured in the construction sector for over 100 years and is a contractual practice originally introduced to provide security against defective work or the insolvency of construction firms.

Most building contracts and sub-contracts entitle the employing party or client or a contractor to keep a percentage, typically around 5%, of the value of the work carried out until completion or making good of defects.

Research by the UK Government showed that unjustified late and non-payment of retention monies was a significant issue for some contractors and that delays in paying retentions become more significant further down the supply chain.

The committees will hold a scrutiny session at the National Assembly on 17th October, and would be interested to hear from the construction industry on the above terms of reference prior to this session. Please submit written evidence to: [email protected]s

Llyr Gruffydd AM (Chair, Finance Committee, National Assembly for Wales)