Construction (Retention Deposit Schemes) Bill 2018 – “The Aldous Bill”

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Construction (Retention Deposit Schemes) Bill 2018 – “The Aldous Bill”

On 9th January 2018, Peter Aldous MP presented this Bill under the 10 Minute Rule Motion in the House of Commons. You can read his presentation in the Hansard.

A second reading date has been set for Friday 27th April.


The Bill is designed to provide security for cash retentions so that they are protected against insolvencies of parties up the supply chain.  Recent government research indicated that £700 million (at 2016 prices) worth of retentions was lost as a result of insolvencies.

This means that for each working the Construction industry is hemorrhaging almost £1 million of cash retentions. This statistic alone justifies urgent intervention to ring-fence the monies.

This lack of security for cash retentions has recently been highlighted by concerns over the financial position of some of the largest UK construction companies.


  • There will be a statutory obligation on any party withholding cash retentions to place them in a retention deposit scheme.
  • This will be brought in as an amendment to the Construction Act. Therefore this will apply to all contracts within the Act (contracts with householders are not included).
  • Failure to deposit retention monies in a scheme will render invalid any contract clause enabling the withholding of cash retentions.
  • Disputes regarding the release of the monies can ultimately be referred to statutory adjudication.
  • The Government will be required to provide regulations for the operation of retention deposit schemes.


  • A flow chart describing how retention deposit schemes would operate is attached.
  • An existing model is the government approved schemes (currently three schemes) for the protection of deposits provided by shorthold tenants. These are not-for-profit schemes.
  • The operators of the scheme would hold the monies in trust so that they cannot be accessed by insolvency practitioners.
  • SEC Group is currently working with a couple of financial institutions to develop a cost-effective commercial scheme embracing a fully digitised platform.


On the assumption that the Bill receives Royal Assent, commencement will depend upon the time taken to have the regulations in place and for governmental approval of prospective operators of retention deposit schemes.


2018-01-09T18:57:23+00:00 9 January 2018|Articles|