MP’s new bill could help Nottinghamshire SME recoup £750,000

A new parliamentary bill – which gets its first reading in the House of Commons – could pave the way for one Nottinghamshire SME to recoup more than £750,000.

A1 Flue Systems has welcomed the bill being tabled by Conservative MP Peter Aldous, which seeks to amend the 1996 Construction Act to ensure that retention money is held in a formal deposit protection scheme.

Currently, construction companies withhold approximately 5% of the value of a contract as retention money until a project has been completed. They often use every trick in the book to avoid paying this, months and years after the project has finished.

A1 Flue Systems which designs, manufactures and installs commercial and industrial chimney, flue and exhaust systems – currently has more than £750,000 held in retention on a range of different projects. It has monies outstanding on completed projects that are still in retention going as far back as 2012.

The Ollerton-based company’s director, TJ Duncan Moir, says she is delighted that the proposed ‘Aldous Bill’ might finally help to stop an issue that blights the industry and has put some firms out of business.

“We’re delighted that Peter Aldous MP’s bill is being introduced under the Ten Minute Rule in the House of Commons because this issue has gone on for too long and is having a detrimental effect on small businesses like us,” she said.

“For example, if we win a £1m project, £50,000 is held as retention money by the construction company to be paid upon completion of the project. However, most companies find excuses not to pay it when a contracted has been completed – and we have a real fight on our hands to get it. That £50,000 could be the difference between making a small profit and making a loss on the project.

“We’re hoping that the proposed ‘Aldous Bill’ will be able to amend the 1996 Construction Act to ensure that retention money is held in a deposit protection scheme – which is somewhat similar to a bonded scheme in the lettings industry, where a tenant’s rental deposit is put into an independent, third-party scheme, rather than going directly to a landlord.”

The proposed bill has attracted cross-party support, with the full permitted complement of 12 sponsoring MPs including Sir Henry Bellingham (Conservative), Barry Sheerman (Labour), Caroline Lucas (Green Party) and Alan Brown (SNP). More than 20 trade associations for the different sectors of the construction industry have also signed an open letter to demand action on the issue of cash retentions in the construction industry.

Duncan Moir is keeping her fingers crossed for the success of the scheme, as she says it will give her business a big boost.

“We understand the reason why construction companies hold retention money until they are satisfied that a project has been completed correctly, but we currently have no assurance that the money can be recouped – and this causes massive headaches for SMEs like us,” she added.

“If a deposit protection scheme is introduced as a result of this bill, then we will have much greater certainty that we will receive full payment for projects.”