What the Removal of Retention Payments Means for Construction Quality
- Mar 24
- 3 min read
The UK construction industry is facing a significant shift. The Government’s response to its late payment consultation has placed retention payments firmly under review, with clear intent to reform long-standing practices. While much of the discussion has focused on cashflow and supply chain fairness, far less attention has been given to the implications for quality. Yet this is where the real impact will be felt
Retention has not just been a commercial mechanism.
It has been a substitute for proper quality assurance.
The Government’s position can be viewed here:
The Real Role of why Retention Payments
Retention has traditionally been used as a form of security a financial lever to ensure defects are rectified after completion.
In practice, it has often done more than that.
It has allowed:
Incomplete or defective work to reach handover
Issues to be deferred into the defects liability period
Quality to be “managed at the end” rather than during delivery
This is not a sustainable model.
If retention is removed, this safety net disappears.
The Risk of End-Stage Inspection
A persistent issue across the industry is the over-reliance on inspection at completion.
By the time defects are identified:
Work is already covered up
Access is restricted
Rework is costly and disruptive
More importantly, the opportunity to prevent the defect has already been lost.
Without retention, there is no longer a mechanism to rely on post-completion correction as a fallback.
This shifts the risk significantly.
Quality Must Be Managed During the Works
The removal of retention payments will force a change in behaviour whether the industry is ready or not.
Quality will need to be:
Built into the process, not inspected at the end
Verified at defined stages, not assumed complete
Owned by those delivering the work, not handed over for checking
This requires a far more disciplined approach to assurance.
Key elements include:
1. Defined Inspection and Test Plans (ITPs)
Clear hold points must be established where work cannot proceed without verification.
2. Competent Supervision
Supervision is not simply oversight — it is active quality control during delivery.
3. Early Intervention
Defects must be identified and resolved as they arise, not accumulated for later correction.
4. Evidence-Based Assurance
Photographic records, checklists, and sign-offs should demonstrate compliance at each stage.
The End of “Fix It in the Defects Period”
The defects liability period has long been used as a buffer for poor quality at handover.
That approach will not survive without retention.
Projects will need to be handed over:
Complete
Compliant
Defect-free
Anything less introduces risk not only commercially, but reputationally and operationally.
Clients will have far less tolerance for unresolved issues where there is no financial mechanism to enforce correction.
A Necessary Shift for the Industry
The proposed changes to retention payments are not just about improving payment practices.
They expose a fundamental weakness in how quality is currently managed.
If the industry does not respond by improving inspection during the works, the consequences are clear:
Increased disputes
Greater project risk
Reduced confidence in delivery
This is an opportunity to reset expectations.
To move away from reactive quality control
And towards proactive, embedded assurance.
Some final thoughts ....
If retention is removed, quality cannot be left to chance or to the end of a project.
It must be planned, managed, and verified throughout delivery.
This is a shift the industry cannot afford to ignore.
If you are reviewing your approach to quality, inspection, or assurance processes, now is the time to act.
Lorna Hagan, Chartered Quality Professional & Civil Engineer
