Written evidence submitted by NHBC [BSB 322]

About NHBC

• NHBC is the leading warranty and insurance provider for new homes in the UK. Our core purpose is to give homeowners confidence in the construction quality of new homes. NHBC sets standards and conducts inspections onsite.

• NHBC's ten-year Buildmark warranty covers around 80% of new homes built in the UK, currently protecting around 1.5 million homes.

• NHBC is a non-profit distributing organisation, with no shareholders, authorised by the PRA and regulated by the PRA and the FCA.

• NHBC Building Control Services is the largest Approved Inspector in England and Wales and the UK’s largest single Building Control Body with more than 30 years’ experience delivering technical advice and a high-quality service.

• NHBC Building Control Services undertake Building Control on residential, commercial and mixed-use developments, and which is licensed and regulated by the Construction Industry Council Approved Inspectors Register (CICAIR).

• NHBC does not build or sell homes; it is not a regulator and does not represent any part of the industry. Individual builders are ultimately responsible for the quality of the homes they build and sell to consumers.

Executive Summary

• NHBC supports the establishment of a Building Safety Regulator (BSR) and believes many elements of the draft Bill will make a positive contribution to building safety; however, there are several concerns which we fear could make buildings less safe, not more.

• The current proposals restrict the Building Safety Regulator (BSR) from choosing the best possible organisation to deliver Building Control. There should be no default preference to use Local Authority Building Control (LABC) and the Regulator should be allowed the freedom to select for itself the most competent provider for each specific development.

• NHBC is concerned that the draft Bill does not contain sufficient detail or information to be able to assess whether it will make buildings safer. The amendments to existing legislation may confuse and leave it vulnerable to misinterpretation.
• The proposals create a three-tiered approach which creates a conflict of interest where the BSR is also able to be the service provider. A regulator should not be involved with the functional delivery of the service it is regulating.

• The draft Bill should instead create a separate, independent body outside of Government and the BSR to oversee all Building Control Bodies (BCBs) and have Building Control Professionals working to a single unified competence framework.

• NHBC supports establishing a system of accountability for those responsible for building safety but there is missing detail on the accountability and sanctions for other key roles in the design, planning and construction phases of the build process. A detailed road map of the entire life cycle process to clarify the roles, accountability and sanctions would be welcomed.

• The draft Bill does not go far enough to ensure clear certification is provided to place designated, non-designated and safety critical products in the UK market, including on how products will perform when constructed with additional products.

• NHBC would suggest the funding for the BSR should follow the same ‘user pays’ model as CICAIR. This will ensure that those interacting with the BSR bear the cost of its operations.

• Further details are required to establish if the regulatory system provides opportunities to address other safety concerns, including how the BSR would identify emerging building safety issues or how the reforms will be easily and clearly communicated.

1. How well does the Bill, as drafted, meet the Government’s own policy intentions?

• NHBC supports many elements of the draft Bill which will deliver the Government’s stated objectives; however we are concerned that its reforms to building control will result in homes being less safe for homeowners, not more.

• The draft Bill effectively restricts the new Building Safety Regulator (BSR) to use the Local Authority as the default provider of building control services. There must be no default provider.

• The BSR should be free to select the most competent and capable provider for a specific development, regardless of whether they are Local Authority Building Control (LABC) or Approved Inspectors (AIs). If the best provider is not chosen, the safety risks which Government is trying to reduce, such as fires, are heightened.

• It is therefore vital that the decades of expertise and capacity that AIs offer, particularly in specialist areas like High Risk Buildings (HRBs) is utilised, or higher-risk buildings will be less safe and face greater delays at a time when the country needs to build more homes. 

• It is also important to note that Local Authority resources are already stretched - in 2018, the NAO found that Local Authorities reduced spending on building control by 48% between 2010-2017[1]. If the BSR’s choice is initially restricted to LABC, this will pose a serious risk of stretching these resources further.

• Therefore, there must be a level playing field between AIs and LABC with no pre-selected default provider. This would give the BSR the widest possible choice to pick from the very best and most appropriate provider of building control. 

• On other policy areas, the draft Bill is meeting important Government objectives. For example, NHBC welcomes the draft Bill’s provisions for legally requiring developers to join a New Homes Ombudsman to give homeowners wider access to redress against builders.

• While homeowners may rely on new home warranty insurance to address structural defects and other areas with their new home (which are regulated and overseen by the Financial Services Ombudsman), they do not have a route to hold builders to account for problems outside of warranty cover.

Recommendation: While NHBC supports many elements of the Bill, the current proposals restrict the BSR from choosing the best possible organisation to deliver Building Control. There should be no default preference to use LABC and the Regulator should be allowed the freedom to select for itself the most competent provider for each specific development.

2. Does the draft Bill establish an appropriate scope for the new regulatory system?

• NHBC supports many elements of the Bill but we are concerned that it does not go far enough to meet a core principle of the Hackitt report to establish a simple regulatory system that will deliver safer buildings.

• The Bill does not detail how aspects of the system will operate effectively and efficiently nor ensure sufficient capacity in the BSR, Local Authorities and Approved Inspectors. Without sight of the planned structure of supplementary and secondary legislation frameworks there is a distinct danger of gaps in the new regulatory system.

• The lack of detail at this important stage does not allow the industry the opportunity to comment on key elements of the new system, such as the complete building control system or the duties and responsibilities of those involved in the design and construction of new buildings.

• In only amending the Building Act 1984 the draft Bill has missed the opportunity to consolidate building safety laws into a single piece of legislation to provide a consistent joined up approach with a common purpose to deliver safer buildings. The amendments themselves are confusing and vulnerable to misinterpretation.

• Both the lack of detail in the Bill and confusing amendments to other legislation makes it very difficult to make an informed assessment on the effectiveness of the proposed regulatory system and ultimately whether it will deliver safe buildings for everyone.

• Further confusion may be created when devolved administrations establish their own road maps and it is unclear how, if at all, common principles will be established.

• NHBC is concerned that the draft Bill creates a three-tiered regulatory approach to building safety which does not deliver a simplified regulatory regime called for in the Building a Safer Future proposals:
• The draft Bill allows the BSR to act as the regulator and building control provider for all buildings.
• The BSR can also appoint Local Authorities or Building Control Approvers to act on its behalf on HRBs.
• For non-HRBs, customers can in addition to the present choice of LABC or Building Control Approver ask the BSR to act as their Building Control Body (BCB).

• The draft Bill does provide the vehicle for greater scrutiny of HRBs which NHBC supports however there are still a risk of conflicts of interest in this proposed three tier system. For example, the Regulator is also able to act as both regulatory and BCB on both HRB and non- HRB buildings.

• NHBC would argue that the Bill should also have explicitly restricted Local Authorities from exercising a Building Control function on any building it owns. This is a conflict of interest that was recognised in the Government’s original consultation[2].

• NHBC fully supports the recommendations made in a report from the Future of Building Control Working Group’s report[3] and believes that these should be implemented in full and incorporated into the draft Bill. This includes delegating oversight of the Building Control profession to a separate, independent body with statutory powers to deliver its remit on par with other registration bodies where health and safety is a prime concern.

• It is vital that this regulatory function is distanced from Government and the BSR to ensure transparency and avoid a conflict of interest, whether real or perceived. An independent body will be more likely to sustain public trust and confidence, particularly where its objectives are firmly rooted in serving and protecting the public.

• NHBC believes that all Building Control Professionals should work to a single unified Competence Framework developed by industry. A separate independent body would then ensure there is the correct level of scrutiny, accountability, consistency and common standards for all Building Control professionals.

• NHBC welcomes the new controls on existing HRBs but the lack of detail makes it difficult to see whether these proposals will deliver a consistent level of safety in existing HRBs within a reasonable timescale. If this timescale is not carefully considered, it will inevitably affect the BSR’s capacity to ensure the safety of approximately 11,000 HRB’s brought into scope. Careful consideration is required on the wider implications of moving the existing HRB housing stock in scope and what this means for the wider industry, in particular the insurance sector.

Recommendation: The draft Bill does not contain sufficient detail or information to be able to assess whether it will make buildings safer. The proposals create a three-tiered approach which creates a conflict of interest where the Regulator is also able to act as the BCB. The Bill should instead create a separate, independent body outside of Government and the BSR to oversee all BCBs and have all Building Control Professionals working to a single unified competence framework.

3. Will the Bill provide for a robust – and realistic – system of accountability for those responsible for building safety? Are the sanctions on those who do not meet their responsibilities strong enough?

• NHBC support establishing a system of accountability for those responsible for building safety. While the draft Bill does provide detail in respect of the accountability for the BSR, BCBs, Accountable Persons and Building Safety Managers; it excludes other key roles in the design and construction phases of the build process. In its current form, the lack of detail on these roles could lead to confusion and misunderstanding in the industry.

• The purpose and level of sanctions in the draft Bill do not appear to reflect the varied importance and responsibilities of different roles. Sanctions should be reasonably weighted and proportionate in relation to responsibility of role and their involvement with fire/life safety matters.

• NHBC welcomes the clarity of the description of the Accountable Person which is clearly defined within the Bill. However, there are many other key roles responsible within the planning, design and construction phases that are vital in constructing safe buildings, yet there is no mention in the Bill about accountability and sanctions for the principal designer, principal contractor, sub-contractors and client.

• While it is assumed this will be covered by secondary legislation, the lack of detail surrounding these roles does not provide the clarity needed on how the new regulatory system will ensure that safer buildings are delivered.

• A detailed roadmap of the entire building life cycle process would be helpful to clarify the roles and accountability as well as clearly link accountability to sanctions.

Recommendation: NHBC supports establishing a system of accountability for those responsible for building safety. However, there is missing detail on the accountability and sanctions for other key roles in the design, planning and construction phases of the build process. A detailed road map of the entire life cycle process to clarify the roles, accountability and sanctions would be welcomed.

6. Does the Bill improve the product testing regime in a way that will command the full confidence of the sector?

• NHBC welcomes the improved controls in the draft Bill to place designated, non-designated and safety critical products in the UK market. However, there is very limited detail in the draft Bill on the direct link between trading Standards and the BSR, in particular how any product issues picked up by Trading Standards will be quickly communicated to the industry at a national and local level.

• It is unclear in the draft Bill on what the process would be when it is discovered that a product installed on a building is classed as non-performing and how the building would be assessed and the rectification process. There should also be a mechanism in place which ensures that, where products are installed onsite there is a process in place for an onsite audit of the product which confirms the product used as constructed will perform in accordance with the product certification.

• The draft Bill does not go far enough to ensure clear certification is provided detailing how products will perform when constructed with additional products. Product certification should clearly state and confirm individual performance information where a combination of products forms a package to ensure the product certifications align when used together.

• An important example of this issue is fire doors where the components making up the complete assembly will be tested together but are then procured separately. Substitution or changes to one of the constituent parts can seriously compromise the performance of the door in use.

Recommendation: While NHBC welcomes the improved controls to place designated, non-designated and safety critical products in the UK market, the draft Bill does not go far enough to ensure clear certification is provided, including on how products will perform when constructed with additional products.

7. Is it right that the new Building Safety Regulator be established under the Health and Safety Executive, and how should it be funded?

• NHBC supports the establishment of a Building Safety Regulator. However, while the HSE has experience of regulating complex areas, we would question whether they have the capacity and resource to deliver the range of specialist activities proposed by the draft Bill as well as remain focused on existing activities, especially in such a short space of time.

• NHBC has concerns on the potential conflict of interest created with the BSR also being able to be the service provider. It is NHBC’s view that a regulator should not be involved with the functional delivery of the service it is regulating.

• As detailed in our response to Question 2, NHBC believes that the draft Bill should instead create a separate, independent body for oversight of BCBs and a single unified competence framework for all Building Control Professionals.

• It is not clear from the draft Bill how the Regulator will be funded and how its wider remit will be delivered. Funding models, such as ‘user pays’, are used extensively in the industry and other sectors and this would seem a sensible approach to ensure that those interacting with the BSR bear the cost of its operations.

• CICAIR is an example of a Government designated body carrying out a regulatory function where the user pays. CICAIR’s core operational functions include maintaining the Approved Inspector (AI) register, maintaining the AI Code of Conduct, investigation of complaints made against AIs, imposing sanctions, and auditing AIs against the CICAIR and industry professional standards.

Recommendation: NHBC supports the establishment of a Building Safety Regulator, but we have concerns on the conflict of interest created with the regulator also being able to be the service provider. A regulator should not be involved with the functional delivery of the service it is regulating. As well as creating a separate, independent body for oversight of building control bodies, NHBC would suggest the funding for the BSR should follow the same ‘user pays’ model as CICAIR. This will ensure that those interacting with the BSR bear the cost of its operations.

8. Does the Bill present an opportunity to address other building safety issues, such as requirements for sprinkler systems?

• NHBC supports the requirements in the draft Bill to address safety issues in HRBs however further details are required to establish if the regulatory system provides opportunities to address other safety concerns. For example, it is unclear how the BSR would identify, report and address any emerging building safety issues in the design, construction and occupation phases for buildings in or out of scope.

• The introduction of the HSE and BSR into the building safety regulatory framework adds additional layers of complexity to the legislative system which could cause delays in quickly communicating and regulating building safety issues. No guidance or allowance is made in respect of the retrospective application of new regulations and the impact on homeowners and the insurance industry.

• The draft Bill does not provide the opportunity to address the issues surrounding clearer product literature, certification and labelling especially those used in fire critical construction. The language used within third party certification of products can be unclear and difficult to understand.

Recommendation: Further details are required to establish if the regulatory system provides opportunities to address other safety concerns, including how the BSR would identify emerging building safety issues or how the reforms will be easily and clearly communicated.

September 2020