After decades of lobbying, consultations, and reports, the Confederation of Construction Specialists (CCS) can finally take a moment to recognise real progress. The direction now being taken by both government and industry on retentions and payment practices signals the significant shift that the CCS has consistently called for.
Reflecting on the Government Briefing attended by CCS in September 2025, which focused on the consultation around late payments and retentions, there was, for the first time, a genuine sense of cautious optimism in the room. Encouragingly, that optimism has proven well placed as change is underway!
Key proposals emerging from the consultation include:
- Retention payments under construction contracts:
we propose to ban the practice of deducting and withholding of retention payments under the terms of a construction contract, consulting on its implementation.
- Maximum payment terms:
we intend to impose maximum payment terms of 60 days, with strictly limited exemptions, to ensure that smaller businesses are paid in a maximum of 60 days.
- Deadline for disputing invoices:
we intend to introduce a statutory time limit for raising disputes. Businesses that do not raise disputes within the time limit will need to pay compensation to their supplier.
- Mandatory interest on late payments:
We intend to make it a requirement that all commercial contracts will contain a right to statutory interest at 8% above the Bank of England base rate.
For an industry that has long struggled with cash flow pressures driven by late payments and withheld retentions, these proposals represent real progress. The CCS will continue to engage closely as these measures develop, ensuring that the voice of Specialist Contractors and SMEs remains central to shaping a fairer, more sustainable construction sector.
For further info: Late payments: tackling poor payment practices