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Posted on 18/12/2017 in Apprenticeship Sector News Stories

Peter Aldous MP's New Retentions Bill Can Boost Apprenticeships: BESA fully support Peter Aldous’ Bill to protect construction SMEs

Peter Aldous MP's New Retentions Bill Can Boost Apprenticeships:  BESA fully support Peter Aldous’ Bill to protect construction SMEs

A new parliamentary Bill, being introduced under the Ten Minute Rule by Peter Aldous MP, has the potential to deliver thousands of new apprenticeships, according to the Building Engineering Services Association (BESA). The Bill’s first reading will be on January 8th. 

BESA fully support Peter Aldous’ Bill to protect construction SMEs

Peter Aldous MP

Peter Aldous is Member of Parliament for Waveney 

Peter Aldous MP

The Bill seeks to amend the 1996 Construction Act to ensure retention money is held in a deposit protection scheme – thus ending the issue of upstream insolvency and the working capital it takes from the industry and SMEs. The average UK contractor has £27,500 withheld per year in retentions.

Payment retentions hurt thousands of small firms by limiting working capital and meaning they cannot train and hire apprentices. Retentions see £10.5bn of annual construction turnover withheld and £7.8bn unpaid in the last three years, further exacerbated by upstream insolvencies that cost £700m of retentions entirely lost through the supply chain in the same three years – this is almost £20m a month, £4.5m a week or £640,000 per day.

BESA Director of Training, Tony Howard, has calculated that in educational and skills terms, £27,500 per contractor per year “for an Apprenticeship Levy payer is the equivalent co-investment for 22 apprentices a year.” He continues; “and if you are a non-levy payer, that amount more than covers the salary for an apprentice, with a van, new tools and equipment and about £6,000 left over.”

When pulled back to a bigger picture, we are missing the opportunity for around 3,000 new apprenticeships in building engineering services alone, for money to sit in unsecured accounts. Let’s help our sector meet the Industrial Strategy by making this money available.”

Peter Aldous has over 20 trade bodies and organisations backing his Bill, alongside several MPs already co-sponsoring:

  • Sir Henry Bellingham MP (Conservative)
  • Alan Brown MP (Scottish National Party)
  • David Simpson MP (Democratic Unionist Party)
  • Ed Vaizey MP (Conservative)
  • Sir Mike Penning (Conservative)

Sir Henry Bellingham, MP for North West Norfolk, has long campaigned to improve apprenticeships. At Prime Minister’s Questions last Wednesday he even raised the issue with Theresa May: “Post-Brexit it will be absolutely crucial that we enhance skills and apprenticeships in the construction and housing sector? Does she agree that now is not the time for the Construction Industry Training Board to be proposing to close its site at Bircham in West Norfolk, putting at risk 600 jobs in a rural area? Will she meet me to discuss this, and will she help me in my campaign?”

Sir Henry went on to say “it is the positive impact on SMEs and apprenticeships, skills and training that led me to sponsor Peter Aldous’ Bill.”

Government research shows contractors, if they had access to withheld retentions, would hire more apprentices. When asked what they would do with retention money if it weren’t withheld or lost 48% said invest in new equipment and facilities, 40% would look to take on more work, 29% would employ more apprentices and 22% would allocate the money to taking on their first apprentice.

BEIS data shows our sector represents over £89bn in the economy and infrastructure and enables a further £597bn of economic, output – or 43% of UK GDP at £808bn. Construction accounts for 9% of the total UK workforce at 3.1 million people, but over 50% of contractors report they have experienced non-payment of retentions in the past three years.

BESA applaud Peter Aldous for his Bill and while supporting him in every way possible, urge any stakeholders in apprenticeships to do so as well.

About besa

The BESA has been putting its members at the heart of building engineering services since 1904.BESA - the Building Engineering Services Association is the UK's leading trade association for building services engineering contractors – representing the interests of firms active in the design, installation, commissioning, maintenance, control and management of engineering systems and services in buildings. 

BESA’s headquarters are in London, but we are active throughout the UK. We have a separate presence in Scotland, Wales and Northern Ireland, as well as eight regional offices across England. This regional presence facilitates member networking and sharing of best practice, business opportunities and advice on local and national developments.

One of the key requirements of BESA membership is the demonstration of technical competence, commercial capability and adherence to health and safety best practice. This is assessed through regular, third-party inspection and auditing, ensuring our members are upholding what is affectionately referred to as the association’s ‘badge of quality.’ BESA membership means that clients can be sure they are employing firms who work to the highest standards, giving reassurance that their project is in safe hands.

BESA members benefit from access to a wide range of services and support that is carefully tailored to their needs, and which helps them to build better and more profitable businesses. BESA is committed to lobbying on behalf of its members on a wide range of issues that affect their businesses and the commercial environment in which they operate. 

BESA is itself a member of the Specialist Engineering Contractors' (SEC) Group and of the Air Conditioning and Refrigeration Industry Board (ACRIB) and works closely with other bodies throughout the sector – including BSRIA, CIBSE, ECA and FETA and is a member of the CIBSE Patrons corporate supporters’ network.

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Apprenticeships 4 England Fully supports this initiative and will be at the 1st reading on the 8th January

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