NFRC (National Federation of Roofing Contractors) welcomes a landmark government announcement that will prohibit the use of retentions in construction contracts and deliver sweeping reforms to payment legislation. The announcement represents the most significant overhaul of the UK's payment regime in over 25 years and will help to address the cash flow crisis that has long crippled NFRC members and other specialist contractors across the construction industry.

NFRC Group CEO James Talman said:

"This outcome is one our industry has been campaigning for years to achieve. “
“For too long, specialist contractors have been forced to operate under a system that allowed larger firms to withhold their money, delay payment, and use their cash as free working capital.
“Today, the Government has shown that it has listened, and we could not be more pleased."

The measures will be subject to a two-year implementation period, and dependent on the parliamentary timetable. This gives industry time to prepare, while providing a clear and firm direction of travel. NFRC will work with our Members and government during this transition period to ensure the incoming legislation is appropriate and effective. We will also continue to advocate on behalf of Members who are exploited by the current laws, which are now conclusively recognised to be unfair.

YEARS OF WORK, FINALLY REWARDED
NFRC has been advocating for reform of payment practices and the abolition of retentions for nearly a decade. In 2021, NFRC estimated that £300 million of roofing and cladding subcontractors' cash was held in retention at any one time. In 2023, 86% of NFRC Members reported difficulties recovering retention payments on local authority contracts. And in 2025, 80% of contractor Members said retentions were still affecting their business. NFRC has taken every opportunity possible to advertise these facts and advocate for reform.

"Our Members are passionate about this issue, not just because it affects their bottom line, but because it affects their people, their livelihoods, and their ability to grow and deliver for the UK,” said Talman.
“The hours our team and our Members have put into this consultation speak for themselves.”

The UK has a critical need for housebuilding, retrofit, clean energy infrastructure, and public sector construction. None of these issues will be adequately tackled if the specialist contractors at the coal face are being strangled by cash flow problems.

CREDIT WHERE DUE
NFRC wishes to acknowledge the Department for Business and Trade for bringing these proposals forward with seriousness and urgency. The consultation process was well-designed, accessible, and genuinely engaged with industry. The government has listened to the evidence industry presented and acted on it.

"We are grateful to the Department for Business and Trade for the rigour and openness they have brought to this process,” said Talman.
“Good consultation deserves recognition, and today's announcement is evidence of what happens when industry engages and government listens.
“We also want to acknowledge the many industry partners, trade bodies, and our own Members who contributed to this collective effort. Special thanks to the CLC taskforce on this important topic headed by Steve Bratt."

The government has confirmed it will proceed with many of the measures proposed in the consultation, including:

• Removing the ability to contract out of the statutory charge of 8% interest on late payment.
• Boards or audit committees of persistently late-paying large companies will be required to publish explanations for poor payment performance and the actions they are taking to address it.
• Banning retention clauses.