Overview

This bill aims to protect retention deposits held in construction contracts. It mandates the establishment of retention deposit schemes to safeguard these funds and facilitate dispute resolution, ensuring timely release of the deposits to contractors.

Description

The bill amends the Housing Grants, Construction and Regeneration Act 1996. It requires the creation of retention deposit schemes for cash retentions in construction contracts. These schemes must be established and managed by an appointed administrator, following regulations set by the appropriate national authority (Secretary of State for England, Welsh Ministers for Wales, Scottish Ministers for Scotland).

Key Requirements:

• Mandatory Schemes: The bill makes it mandatory for construction contracts to use these schemes once they are operational.
• Immediate Deposit: Upon withholding cash retention, the money must be immediately deposited into the approved scheme.
• Notification Requirements: Both the payer (client) and payee (contractor) must be notified of the scheme administrator's details.
• Refund Provision: If the money isn't deposited or the necessary notifications aren't sent, the payer must refund the retention to the payee within seven working days.
• Northern Ireland: The bill gives the power to extend similar provisions to Northern Ireland via Order in Council.

Government Spending

The bill doesn't directly specify government spending figures. The costs will likely involve setting up and regulating the new schemes and may include administrative overhead.

Groups Affected

• Construction Clients (Payers): Will be required to use and contribute to retention deposit schemes, potentially incurring administrative costs.
• Construction Contractors (Payees): Will benefit from increased security of their retention deposits and a clearer dispute resolution process.
• Scheme Administrators: Will be responsible for managing the schemes and ensuring compliance.
• Government Agencies: Will be responsible for overseeing the implementation and regulation of the schemes.

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