David Barnes, head of policy and public affairs at the Chartered Institute of Building (CIOB), said: “The government’s commitment to tackling late payments and improving cash flow for small businesses across the UK, particularly within the construction sector, where these issues are rife, is most welcome by CIOB.
“The direction of travel is positive, and the proposed measures – including stronger enforcement powers and a ban on the withholding of retention payments – represent a significant and much-needed step forward.
“The construction sector recorded the highest number of insolvencies of any industry in the 12 months to January 2026, with 3,912 cases, accounting for 17 per cent of all insolvencies.
“This underlines the urgent need for reform that supports fair payment practices and protects businesses.
“While the proposed ban on retention payments is encouraging, the industry will need clarity on how these changes will be implemented in practice.
“A clear, well-structured transition plan will be essential to ensure existing contractual arrangements can adapt effectively.”
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