The National Federation of Roofing Contractors (NFRC) has welcomed the launch of the Government's new Small Business Plan, which includes a consultation on unfair payment practices in the construction industry.

Chief among these is the practice of cash retentions, which the NFRC has long campaigned to abolish.

NFRC Group CEO, James Talman, said: "This is a critical opportunity to end the unfair practice of retention once and for all. Our members consistently report this as one of their greatest business challenges, and it's encouraging to see the Government finally taking action."

The NFRC estimates that over £300 million is currently locked up in retentions across roofing and cladding alone. A previous report from 2017 estimated that £6 billion is held in retentions across the UK construction industry at any one time. The collapses of major firms like Carillion and ISG have highlighted the vulnerability of subcontractors, who have not only lost active jobs but have also failed to recover retention payments.

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While acknowledging that ensuring quality is essential, the NFRC believes that retentions are no longer fit for purpose. It is calling for their complete abolition in sectors like roofing where better protections, such as long-term guarantees and skilled training schemes, are already in place. For other sectors, the NFRC suggests the government mandate Project Bank Accounts (PBAs) or adjusted trust accounts, which are models already proven to be successful overseas.

The NFRC is also encouraging all roofing and cladding firms to respond to the consultation. James Talman said: "It takes minutes to respond, but could change the industry for decades."

The consultation also proposes other reforms, including legally enforceable maximum payment terms, mandatory interest on late payments, and fines for persistent late payers.