Cash retention under construction contracts: short life working group final report and recommendations

3. Methodology

25. The Short Life Working Group (SLWG) were asked to investigate a fairer, more neutral and more protected approach to assurance in construction contracts and propose a practical methodology to Scottish Ministers.

26. We were provided with a baseline for discussion as follows:

Baseline: Organisations which commission construction work must have the ability to avoid becoming liable for costs arising from unmet contract performance by implementing a means of assuring it.

As a minimum, the SLWG were asked to consider the options that emerged from the Scottish Government consultation:

• legislate to ban retentions
• introduce a retention deposit scheme
• consider the merits of alternative mechanisms of assurance

27. We were asked to:

• consider the information from the Pye Tait report on the practice of cash retention under construction contracts
• investigate the options and compile a strong evidence base including, where possible, providing full costings
• propose a practical preferred option to Scottish Ministers for implementation pending any necessary further detailed consideration

28. Membership of the SLWG was drawn from across the sector to represent the breadth of views on the practice of retention, and the possible solutions to address the issues associated with their use.

29. The group met on six occasions: an introductory session, three meetings to cover each of the proposed options and two meetings to consider and agree recommendations.