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Signoff: David Taylor

WHO can blame anybody for being a little bit approximate with the facts when it comes to their insurance?

Has anybody ever advised you to hold up your hand and admit liability after you've accidentally reversed your bullbar-festooned pickup into a little old lady's parked Morris Minor?

Of course not. We are taught to lie through our teeth and deny all responsibility - let the insurance companies sort it out and insist that it was the old lady's fault, if anyone asks.

Insurance is all about managing risk, something that anybody in the construction industry should be pretty good at. But it is one of those paradoxes of life that the people who need insurance the most are the ones that nobody wants to insure.

What they need is a canny broker, someone who knows their way around: 'Roofer, you say? Better not put that on your proposal form. Try 'aerial flooring'.' It's merely a matter of interpretation.

Why worry your insurers? They've got enough on their plate without you giving them the colly-wobbles by telling them you strip asbestos out of old buildings. Explain you're in the 'mineral recycling' business - which after all you are.

Things could get a bit tricky if you need to make a claim - you know how finicky loss adjusters can be. So just watch how you go. All right?

WERE you surprised when the Government dismissed the Trade and Industry Select Committee's recommendations and decided that retentions should be retained?

How could you have been so naive? Just because a majority of the industry detests the retentions system.

Just because abuse of the system is so widespread. Just because this abuse is putting small firms out of business every day.

Just because the whole Rethinking Construction philosophy abhors the use of retentions and the Select Committee recommended their abolition.

Just because of all this, you expected the Government to consider outlawing them? Get real.

I'm as guilty as anybody else in expecting some reform of the system, but if only I'd done the arithmetic first I'd have seen the writing on the wall.

The UK construction industry turns over business worth approximately £65 billion every year.

Roughly £3.25 billion - or 5 per cent of the total output - is, at any given time, being withheld in the form of retentions.

About 40 per cent of construction output is in the public sector. So that means, at a rough estimate, about £1.3 billion of other people's money is being held back by Government agencies. And, of course, some of that is never paid back to those to whom it belongs.

So why should the Government want to get rid of retentions?

It would only have to increase taxes to make up for it - and you know how popular that would be.

Oh, and by the way, don't forget the Government is a Best Practice client and backs the Egan reforms.

So it must be all right to keep the retentions system.

HAVE you noticed how people get suspicious if a contractor makes a profit? One of the biggest criticisms of the Private Finance Initiative is that some big construction firms have been making money from it - tut, tut.

Well now I hear that Network Rail (you know, Railtrack without quite so much crap) is asking its maintenance contractors to stop making so much profit.

The client's line goes something like this: we've got a huge operating deficit and there you are running a tight ship and making a profit. It simply isn't fair.

I like that.

Next time I'm in Harrods (which won't be any time soon if I go by train) I will explain to Mr Al Fayed that he'll have to accept a tenner for that half-kilo of Beluga caviar. . . well, I'm sorry, but I just can't afford to pay more than that.