In October 2017 the business department published its consultation on retentions together with the research carried out by Pye Tait. The research revealed that, due to upstream insolvencies, the industry lost £229m a year (at 2016 prices) worth of retention money over a three-year period. These losses would have been primarily borne by SMEs, especially tier 2 and 3 contractors. On public sector works these lower tiers of contracting always assume the risk of insolvency since public bodies do not go bust. We are now more than two years down the road and, based on Pye Tait's figures, the industry is likely to have lost another £S73m worth of retentions. This is likely to be a conservative figure since it doesn't take account of the (still to be announced) huge retention losses resulting from the Carillion collapse.
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