The findings from the 2016 study, requested by the Department of Business, Energy & Industrial Strategy (BEIS), relate to a three-year time period over which the lossess occurred. 

The Specialist Engineering Contractors’ (SEC) Group has described the figure as “shocking” and far in excess of its own estimates, with chief executive Rudi Klein adding that the vast sum justifies legislation to ring-fence retention monies.

He commented: “The bulk of these monies will have been lost by SMEs. They legally belong to the firms from whom the monies were withheld; consent to the withholding of the monies did not extend to their being used to pay off the insolvent party’s creditors.

“This represents a scandalous and continuing drain on the scarce resources of SMEs in the construction industry.”

SEC Group, which represents the largest sector in the construction industry by value, has been campaigning for all cash retentions to be deposited with independently run retention deposit schemes.

Mr Klein added: “Given the dire finances of some of the UK’s largest construction companies, it is even more urgent that Parliamentary time is secured for legislation to protect retention monies.”