Public Bill Committee: 4 February 2016
Enterprise Bill [Lords], continued
*To move the following Clause—
“Payment practices: protection of retention monies in the construction industry
- Any clause in a construction contract or related contract enabling a party to withhold retention monies shall be of no effect unless, upon their withholding, the monies are deposited forthwith in a retention deposit scheme authorised by the Secretary of State.
- Where a clause is rendered ineffective under this section any retention monies already withheld and not placed in a retention deposit scheme must be refunded in full to the party providing them.
- For the purpose of section (1) the Secretary of State shall make regulations to govern arrangements for establishing and operating retention deposit schemes.
- Arrangements under section (3) must be arrangements under which a body or person (“the scheme administrator”) undertakes to establish and maintain a retention deposit scheme (“the scheme”).
- The regulations made under section (3) must include requirements relating to—
- the selection and appointment of the scheme administrator;
- the funding and management of the scheme; and
- the release of retention monies from the scheme.
- Where the Secretary of State is satisfied that a proposed scheme complies with the regulations made under section (3) he may give authority for the proposed scheme to operate as a retention deposit scheme.
- The Secretary of State may delegate his power under subsection (6) to the Scottish Government, Welsh Government and Northern Ireland Executive.
- The monies held in the scheme must solely be retention monies and any interest accruing on the monies.
- In this section –
- “construction contract” has the same meaning as in the Housing Grants, Construction and Regeneration Act 1996.
- “retention monies” refers to monies which are withheld from monies which would otherwise be due under a construction contract, the effect of which is to provide the paying party with security for the current and future performance by the party carrying out construction operations of any or all of the latter’s obligations under the contract.”
Member’s explanatory statement
This new Clause would require retention monies provided for within construction industry contracts to be placed in an approved retention deposit scheme.