Communities and Local Government CommitteeWritten evidence submitted by NICEIC and ECA

About NICEIC

Since 1956, NICEIC has been the UK’s leading independent regulatory body for the electrical contracting industry and ancillary trades and operates a Part P registration scheme. It currently has over 26,000 registrants. It is a brand of the Ascertiva Group, one of the world’s leading third party certification companies with its members servicing business, industry and government. It is a leading provider of gas training and personnel certification. CEO Emma McCarthy is a member of the Building Regulations Advisory Committee (BRAC). The NICEIC is owned by the Electrical Safety Council, the consumer charity which promotes electrical safety in the UK.

About ECA

Founded in 1901, the Electrical Contractors’ Association (ECA) is the UK’s leading trade association representing the interests of contractors who design, install, inspect, test and maintain electrical and electronic equipment and services. The industry has an aggregate turnover of over £5 billion, employing around 350,000 operatives and 8,000 apprentices. Our 3,000 members range from local electricians to national companies with several branches employing thousands. Through ECA and ECA Certification, the organisation currently has over 9,000 registered or certified companies. CEO Steve Bratt is a former director of CORGI Services and has expertise across the building services industry.

Summary

ECA and NICEIC have contributed to this submission together, united by a belief in the core values of safety and excellence. Together we represent 80% of the electrical contracting industry and we are the majority voice of the industry. NICEIC and ECA have practical and workable suggestions on how to streamline regulation while ensuring compliance with the Building Regulations.

The electrical and gas installation industry should be treated with parity in terms of the need to keep people safe and both electrical and gas work should be under the jurisdiction of the Building Regulations.

The Department for Communities and Local Government (DCLG) review of the Building Regulations has caused uncertainty and confusion in an electrical contracting industry already ravaged by the economic climate, a culture of reckless bidding and redundancy.

We strongly advise against the removal of any Building Regulations and in particular are fully behind the key principles of safety and consumer confidence that are enshrined in Part P. However, we also advocate amending Part P to ensure that the electrical contractor’s red tape and costs are cut whilst continuing to ensure the homeowner is protected from fire and injury.

With an increasing dependence on electricity in the home, due to increased installation of microgeneration, other renewable technologies and the associated feed-in-tariffs, Part P of the Building Regulations will be crucial to maintaining domestic energy security and consistency.

With the roll out of the Green Deal and the smart meter programme, Part P will be increasingly necessary to ensure confidence in the consumer’s installations. Sub-standard installation work from incompetent installers will compromise government planning

The Competent Persons Schemes (CPS1) is an effective mechanism for delivering Part P and could be expanded. The CPS facilitates cost effective compliance, consistency and confidence. In 2009 the CPS relating to Part P saved the taxpayer an administrative burden of £132 million—these are government figures (see 2.1).

We believe that in order to ensure that Part remains effective in providing safety for consumers that all contractors are members of a competent person’s scheme. Part “P” has been successful in registering a significant proportion of contractors in the Scheme and ensuring that they undergo a consistent, uniformly applied quality assessment. However in order to ensure that work is conducted to the highest standards, we believe that every electrician that is legally responsible for signing off work (qualified supervisors) should be, through his or her firm a member of a competent persons scheme.

Existing costs to comply with Part P of the Building Regulations are not exorbitant. For the typical small businessman notifying on average two jobs a week, compliance with the regulations via a Competent Person’s Scheme costs just under £2 a day.

Risk Based Assessment (RBA) of electrical contractors has already been proposed by DCLG but not formally considered as part of the current review of Part P. The cost of registration to a Competent Persons Scheme for the electrical contractor would therefore be reduced without the need for consultation and the extra expense DCLG is incurring by running it. The Committee should take this into account and recommend that CPS is the best way to ensure cost effective compliance for electrical contracting businesses.

RBA would allow Part P scheme providers, such as NICEIC and The ECA, to reward those contractors who have an exemplary track record, whilst bringing those with weaker records up to the high standards that we should demand in an industry where safety is key. Moving to RBA removes the burden on contractors to arrange annual assessments and removes the associated loss of earnings and productivity that this causes.

This system would not compromise on safety and would not mean annual surveillance visits being completely abandoned. Rather, this would be a constructive and value added compromise which saves cost, stress and time for competent electrical contractors. Crucially this reform, coupled with mandatory registration to a CPS would create an environment where all contractors would have to perform to the highest standards and as a consequence provide consumer confidence.

We are against any unregulated DIY electrical or gas work; it is simply too dangerous. There should be a standard fee for those not registered on a CPS to notify their work to Local Authorities, thus ensuring a fair, unrestricted and reasonable path to compliance with the Building Regulations for those who are competent. Finally, there is an alternative to electrical safety sitting within the Building Regulations. In the electrical contracting industry’s case that would be an industry-lead solution put forward by ECA and NICEIC and we would welcome the opportunity to discuss this with the Select Committee.

Part P: Safeguarding Electrical Health and Safety in Domestics Dwellings

1.1 We strongly oppose the deregulation of electrical installation work in the home. Electrical installation work is potentially dangerous and since 2005, when Part P was launched, over five million jobs have been notified to NICEIC, each representing an auditable record of accountability and a guarantee for the consumer if something goes wrong.

1.2 We and 85% of all NICEIC registered contractors agree that to amend, rather than end Part P of the regulations, would be the right way forward. Many significant amendments have already been proposed by the Review of Competent Persons Schemes by DCLG and prove there is scope within the existing regulations to improve.

1.3 Through regular contact with our members and registrants, we know that there are legitimate concerns about DIY electrical work. DIY work carried out in the home by those who have no knowledge of electrical safety is highly dangerous, common and often remains unchecked.

1.4 There is evidence of inconsistency in the level of fees charged by Local Authorities for those DIYers who have undertaken electrical work. We strongly recommend consistent fees across all local authorities proportionate to the time and cost for the local authority to test and inspect the work. This would ensure a reasonable path for those wanting to undertake electrical work in their own home.

1.5 For the competent electrical contractor the proposition of joining a DCLG approved CPS is a straight forward exercise requiring demonstration of good electrical craft and practices—something that should be evident for all competent electricians. Each of the approved schemes provides a consistent level of customer support and guidance backed by an industry agreed specification which each CPS has signed up to.

1.6 At present, there are firms who may operate “under the radar” by choosing not to register under Part P or to contact Building Control. This not only means that not all the industry is policed, but that those contractors who are complying are placed at a significant disadvantage in terms of cost and increased bureaucracy. Through reform of the regulation of Part P, we can not only ensure that the whole industry is policed, but that those firms complying with the regulations are not placed at a disadvantage. Through bringing all contractors into a competent person’s scheme, we can reward compliant contractors, whilst ensuring that those contractors who fail assessments or have not been complying are helped to meet the high standards expected by the industry and the consumer. For contractors with a proven track record we believe that through reforming the assessment process to an RBA will reward compliance and best practice.

1.7 With the increasing dependence on electricity in the home, Part P of the Building Regulations will be crucial to maintaining domestic energy security and consistency with the increased installation of microgeneration and other renewable technologies and the associated feed-in-tariffs. The Department for Energy and Climate Change’s (DECC) commitment to carbon reduction places a reliance on renewable energy and an incentive to the homeowner via a system of tariffs. Should Part P be removed there is a risk of inconsistency in the quality of electrical installation work. This, coupled with the loss of auditable notifications to Local Authorities, could also jeopardise DECC’s Green Deal, (including Annex R—lighting controls and Annex G—storage heaters, detailed in the PAS2030 document) its Microgeneration Strategy and erode consumer confidence in the technology and its associated schemes.

1.8 The proposed smart meter roll out programme may also be adversely affected should Part P be removed. The programme will make it necessary to ensure consistency and confidence in the consumer’s installation for energy providers to ensure the smart meter programme is a success and a “smart grid” is created.

Costs of Compliance

2.1 DCLG’s Simplification Plan Update 2009—The route to better regulation estimated that Competent Persons Schemes had an “expected saving estimated conservatively at £110 per case. 1.2 million electrical work jobs are undertaken and certificated by Part P Competent Persons per year, this gives an ongoing administration burden saving of £132 million per year.”

2.2 The saving is the amount Local Authorities would otherwise have to spend inspecting the installations, thanks to self-certification by electrical contractors. The DCLG review of Part P should take this into account; Part P CPS have saved the taxpayer significant funds in the past by providing an auditable trail to domestic electrical installations and will continue to do so for the foreseeable future.

2.3 For a small business the cost of NICEIC Part P registration and notifications at this time is just under £2 per day. For a medium sized business about £3.50 per day. For a large business registration works out at about £27 per day. If RBA of contractors is adopted, there is a potential to reduce costs even further (See Appendix 2 for full figures).

2.4 In 2011 it was proposed by DCLG that RBA would be introduced into the reauthorisation of CPS, reducing the cost of registration for the electrical contractor. The Select Committee should take this into account and recommend that CPS is the best way to ensure cost effective compliance for electrical contracting businesses.

2.5 The model proposed for RBA is based on an industry developed and agreed process. The assumptions made in the RBA model includes indicative pricing which may go up or down depending on final RBA requirements. The RBA will be offered to enterprises that have met the RBA criteria, however if the enterprise chooses, they can remain on the current system and have an annual visit by the Scheme Operator.

2.6 The benefits to RBA are clear—there are cost savings in both the annual fees payable to a scheme operator as well as the time saving for the registered enterprises, therefore cutting the cost burden to the enterprise. However for the RBA to provide safety and to remove unnecessary burdens on contractors any risk based assessment must be coupled with all contractors registering with a CPS, otherwise compliant and competent contractors will always be placed at a disadvantage.

The cost of “being an electrician”

2.7 Like all business there is a capital expenditure, and Appendix 3 is an estimated cost of operating as an electrical contracting enterprise. The cost is based on an individual who has already “qualified as an electrician” and gone through the appropriate training but does not have any tools or equipment.

2.8 When looking at the costs of “being an electrician”, the largest capital expenditure for any electrician is fundamentally their transport costs and test equipment.

2.9 Electricians or enterprises who are not Part P registered must still undertake work in line with the Building Regulations and current edition of the IET Wiring Regulations and must have the equipment to test their installation work is safe and compliant. Therefore their operating costs must reflect this model or one similar to it.

UKAS Accreditation

2.10 UKAS has been held up by ministers as a key measurement of effectiveness and competence of CPS operators. UKAS Accreditation is important and something Ascertiva Group absolutely agrees with. UKAS accreditation for NICEIC and ECA Domestic Installer Scheme alone works out as a cost to of £30 per day.

A levy on Scheme Operators

2.11 A levy should be put onto Part P CPS Operators to publicise the Regulations to householders. This would help ensure that small businesses registered with the Scheme have the right level of marketing support to win business from homeowners.

One level of registration

2.12 The current system in place for enterprises undertaking electrical installation work as an adjunct to their other work is not working. The “defined scope” of competence within schemes has limited numbers of registrants, decreasing in size year on year. Therefore the Defined Electrical Competence scheme listed in Schedule 3 of the Building Regulations should be discontinued.

2.13 The Minimum Technical Competence (MTC) requirements for other self-certifiable work that may include electrical installation work as an adjunct to their main work should be enhanced to include appropriate electrical installation competence requirements and CPS operators should identify registrants on their CPS that undertake only a limited scope of electrical installation work (for example, electric showers or electric gates). This will ensure a clearer message to consumers as well as enterprises who undertake limited electrical works.

What Part P registered contractors say

2.14 A survey on Part P of the Building Regulations was sent in May 2011 to NICEIC registered contractors. 1,437 completed it.

85% said retain Part P but amend and improve it.

73% say public listing of their company for consumers is strongly valued or critically important (ie a business benefit provided by registration).

49% of NICEIC contractors have seen an improvement in the standard of electrical work since Part P was brought in.

95% said no to allowing DIY work without the need to notify.

90% said that all installers carrying out electrical work under the Building Regulations should be required to register as Competent Persons.

62% agree with Risk Based Assessments.

Over 50% agree that registration fees are largely fine.

93% want to see more frequent and significant action against non-compliance.

73% want schemes to jointly fund consumer publicity.

96% want DCLG to recognize the need for increased public awareness.

Part “L”—How can it be made more effective?

The Government has rightly highlighted that Part L (Conservation of fuel and power), which sets minimum standards on the energy efficiency of work carried out, needs to be tightened so as to ensure that buildings continue to be built and modified in an increasingly energy efficient way and that the estimated energy savings from having work undertaken really are captured in reality. The Government has also correctly identified that guidance relating to Part L is too complex and is hindering compliance. We support this view and would be happy to help draft compliance that can be practically followed.

However, the problem goes beyond the highly complex guidance. Awareness of the requirement (and its upgrading in October 2010) is very low amongst both operatives and consumers. Additionally, beyond the big building projects, Part “L” is going widely unenforced. Understandably, budgets for local authority Building Control checks are limited. This is punishing those firms that are adhering to the requirements. For example, we have had reports that electrical contractors factoring in the environmental standards demanded by Part “L” into their quotes are losing out on business to contractors who charge less by carrying out work to a lower environmental standard. Further to this, when Building Control Officers do check and test developments, it is often after the building has been erected, meaning verification on whether a contractor has followed Part L is more difficult.

The ECA and NICEIC currently offer members and registrants a low cost self-certification assessment for Part L as a core element of membership. Detailed guidance and telephone support lines are also available. We are currently looking at how we could develop an enhanced service to help combat the above compliance issues.

We believe we could work with Building Control Officers to develop a process whereby we could conduct random audits of in-progress developments to ensure full compliance with the requirements of the Approved Document. We believe that this service, if replicated by other industry bodies and providers, could be an efficient way of promoting awareness and strengthening compliance rates across the industry in a way that is neither costly for the taxpayer or the contractor, or is time-consuming for the latter. We are currently exploring this idea.

Summary of Suggested Reforms

Competent Persons Scheme (CPS): At present not all contractors comply with Building Regulations and in particular Part P. This impacts on the safety and the market, and results in those that do comply and work to high standards being put at a disadvantage to those who do not adhere with the necessary safety measures that Part P provides for consumers.

We believe that through bringing all contractors into a CPS we can ensure that the high standards become universal across the industry, reduce burden on those contractors with exemplary records and provide the consumer with confidence in the safety of the service provided.

RBA: Currently each contractor who is a member of a CPS is subject to annual visits to maintain their registration, irrelevant of how they perform throughout those twelve months.

Reform of the assessment criteria to reward those companies with exemplary records, whilst ensuring that all contractors meet the same standard is essential to ensuring a thriving and fair industry.

These two key reforms would reduce costs and save time for competent electrical contractors, whilst ensuring that all contractors adhere to best practice and the highest of standards, and thus provide the best service to consumers.

CONCLUSION

Part P is crucial in ensuring we maintain the highest standards of electrical safety in dwellings in England and the regulation should be retained and reformed. We believe that the CPS remain the most cost effective way to comply for the electrical contracting business. As an overall cost, registration with a scheme and notifications of work is less than £2 a day for the small business. There is potential for this cost to be reduced further with DCLG’s reauthorisation of Competent Persons Schemes and the adoption of Risk Based Assessments.

January 2012

APPENDIX 1

THE SAVINGS BY USING A COMPETENT PERSONS SCHEME FOR PART P

The cost savings to a Part P registered business when using a Competent Persons Scheme are shown below. These are real-life cases, where only the company names have been changed. The total cost of notification via a Local Authority Building Control (LABC) versus the total cost of notification via a Competent Persons Scheme, in this case NICEIC. The latter provides an auditable, affordable route to compliance.

Customer name	No. of jobs	Scope	LABC name	LABC cost £	Tot cost LABC £	NICEIC Annual Fee £	BCC £	Tot BCC £	IBW £	Tot IBW £	Tot by NICEIC £	Difference (Saving) £
Company 1	14	installation of a shower, extractor fan, heated towel rail and light	Chesterfield	285	3,990	379	1.5	21	1.5	21	421	3,569
Company 2	15	full rewire	Luton	285	4,275	379	1.5	22.5	1.5	22.5	424	3,851
Company 3	70	rewire and replacement consumer unit	Redditch	235	16,450	379	1.5	105	1.5	105	589	15,861
Company 4	17	partial rewire	Wokingham	400	6,800	379	1.5	25.5	1.5	25.5	430	6,370
Company 5	24	replacement consumer unit	Brighton & Hove	129	3,096	379	1.5	36	1.5	36	451	2,645
Company 6	20	replacement consumer unit	Bristol	156	3,120	379	1.5	30	1.5	30	439	2,681

APPENDIX 2

JULY 2011: COST OF COMPLIANCE TO CONTRACTOR VIA COMPETENT PERSONS SCHEME

The tables below are based on 365 days for the Annual fee and 42 working weeks per year with the enterprise paying by Direct Debit. The notification volumes are an estimate based on experience and notifying work online and not by fax:

SOLE TRADER

Domestic Installer Scheme (DIS) only
No.Qualified Supervisor	1
No. sites	1
Successful assessment, no changes to registration

	cost per year	cost per day
Annual fee	£379.00	£1.04

BCC costs	week	Working year (42wks)	cost per day
No. jobs reported	2.5	105
BCC cost (online)	£1.50	£157.50	£0.43
IBW cost	£1.50	£157.50	£0.43
Total cost		£694.00	£1.90

MEDIUM SIZED ENTERPRISE WITH TWO QS AND ONE OFFICE

DIS only
No.Qualified Supervisor	2
No. sites	1
Successful assessment, no changes to registration

		cost per year	cost per day
Annual fee		£379.00	£1.04
Additional QS		£290.00	£0.79
	Total	£669.00	£1.83

BCC costs	week	Working year (42wks)	cost per day
No. jobs reported	5	210
BCC cost (online)	£1.50	£315.00	£0.86
IBW cost	£1.50	£315.00	£0.86
Total cost		£1,299.00	£3.55

LARGE ENTERPRISE WITH 10 SITES AND 10 QS

DIS only
No.Qualified Supervisor	10
No. sites	10
Successful assessment, no changes to registration

		cost per year	cost per day
Annual fee x 10		£3,790.00	£10.38
Additional QS		NA	NA
	Total	£3,790.00	£10.38

BCC costs	Week	Working year (42wks)	cost per day
No. jobs reported	50	2100
BCC cost (online)	£1.50	£3,150.00	£8.63
IBW cost	£1.50	£3,150.00	£8.63
Total cost		£10,090.00	£27.64

APPENDIX 3

Item	Cost	Comment
Vehicle	£3,000	Second hand vehicle
Vehicle Insurance + Road Tax	£800	Estimated cost
Hand Tools	£300	NICEIC Large tool kit
Plant	£799	Dewalt 6 piece set from Screwfix
Test Equipment	£699	Megger 1553 from NICEICDirect
Public Liability Insurance	£68.25	From NICEIC Insurance
Books	£150	17th Edition Regs + Guidance books
CPS Fees	£379	NICEIC DIS Fee

Total

£6195.25

Therefore the only variance between a registered and non-registered enterprise is their CPS registration fee, which equates to less than £2.00 per day for a small business.