Building Safety Bill

Written evidence submitted by the Local Government Association (LGA) (BSB31)

S ubmission to the House of Commons Public Bill Committee

Building Safety Bill

Summary

· The Local Government Association (LGA) is the national voice of local government. We are a politically led, cross-party membership organisation, representing councils from England and Wales.

· Our role is to support, promote and improve local government, and raise national awareness of the work of councils. Our ultimate ambition is to support councils to deliver local solutions to national problems.

· The LGA welcomes the introduction of the Building Safety Bill. We believe it will strengthen the building safety system in the UK, especially in relation to new buildings. It is, therefore, an important step in the right direction.

· The Bill impacts councils as duty holders and as regulators and impacts fire and rescue services as regulators. Our comments and concerns on the Bill are dealt with under separate headings below.

Key messages :

· Government should pay up-front remediation costs and seek to claim as much back as possible either from those directly responsible or from the private developer industry.

· Any protection for leaseholders against remediation costs should also cover social housing providers.

· The costs imposed on councils as landlords by the Bill and by fire safety reform need to be covered by new burdens funding.

· The scope of the higher-risk regime is too narrow, and height is too crude a basis for it. A better approach would be:

o For new buildings: The Gateways that will be created under the Bill’s amendments to the Building Act 1984 should apply to all major works, including for buildings under 18m where the local authority remains the building control authority.

o For existing buildings – adapt the Building Prioritisation Tool that has been developed for the Fire Safety Act to identify the higher risk buildings.

· Alternatively, we want:

o A timetable to expand the Bill’s scope to below 18m on the face of the Bill

o All new care homes and hospitals to be covered by the Gateway system, not just those over 18m.

In addition, the Bill should be amended to require any permitted development that results in a building that would be in scope of the Building Safety Bill if newly constructed, passing through all three Gateways with the Building Safety Regulator (BSR) as building control authority.

· The Bill does not provide sufficient clarity on the duties of Accountable Persons and the siting of those duties within complex ownership structures. The provision of increased detail on the role and duties of Accountable Persons by the Government will facilitate effective and expedient transition to any new system.

· The regulator must give Accountable Persons adequate time to implement the new system and provide appropriate guidance.

· Imposing the developer levy on councils would leave council tenants paying for the failings of private developers. If the Levy is imposed on social providers, their ability to deliver the improvements and additions to the housing stock that the Government requires will be put at risk.

· An effective construction product safety system must deliver real consequences for the owners and managers of companies that miss-sell products. The product safety system in the Bill must provide a national prosecution funding resource, a single national test system, adequate officer training, effective links to building control and effective deterrents against miss-selling and misuse.

· Competition in building control needs to end for major works in residential buildings of all heights.

· The Building Safety Regulator should be required to use local authority resource, in the first instance, on the face of the Bill to protect the significant investment in building control teams that local authorities will be required to make because of the Bill.

· The Government needs to invest in the necessary skills to ensure the new regime is effective and to allow reimbursement charges to be set locally.

The burden on leaseholders:

· In the private sector, leaseholders are facing the costs of interim measures, rising insurance charges and remediation bills that could bankrupt them in some cases, while thousands of flats are unsellable. As set out in our position statement on leaseholder costs, the LGA is concerned that the failure to protect leaseholders will leave councils to pick up the pieces as homeowners are made homeless and dangerous buildings left unfixed.

· Leaseholders bought their property in good faith, unaware of the failure of the regulatory system for building safety, or the possibility that some product manufacturers were misrepresenting dangerous materials as safe. Unlike the product manufacturers, contractors, developers, and designers who had a responsibility to know what the building regulations required and to deliver buildings that complied with them, leaseholders are blameless.

· In most cases freeholders are equally innocent, having also purchased freeholds in good faith, with no responsibility for compliance with the building regulations. In fact, often the freehold is owned by the leaseholders.

· The Bill seeks to alleviate this problem in three ways:

i) It excludes remediation costs from the Building Safety Charge; however, this does not in itself prevent remediation costs being passed on through service charges. In fact, the Bill is likely to make it easier to do so by providing a legislative justification for adding remediation costs to service charges.

ii) It extends the scope and the duration of the Defective Premises Act. However, the Defective Premises Act (DPA) has seen relatively little use to date and the ability of contractors to go out of business to avoid being held to account for inadequate work means that it is unlikely to offer much assistance against smaller concerns. Large developers and contractors will be better able to afford lengthy litigation than leaseholders or most Accountable Persons. If the Government believes the Defective Premises Act is an effective remedy for leaseholders, it should take the powers to use it itself to recover the cost to the taxpayer of fixing buildings. The DPA can only be more effective when used by the Government – and such use combined with the meeting of up-front costs from public funds will ensure leaseholders do not lose their homes while waiting for cases to be resolved.

iii) The Bill requires Accountable Persons to seek alternative sources of funding before imposing remediation costs on leaseholders. This reflects existing practice under the Building Safety Fund and is not expected to benefit many leaseholders, although it may help in rare cases where owners have chosen to charge leaseholders rather than access government funds. We understand it is the Government’s intention to allow Accountable Persons to charge leaseholders before seeking alternative funds and reimburse them if such funds are secured. As the works involved are often required by law, this raises the prospect of Accountable Persons – including councils - being obliged to make leaseholders pay up front costs for works the Accountable Person is simultaneously claiming in court are the responsibility of a third party. This will put our members in an impossible position and could leave leaseholders to go bankrupt while waiting for justice.

· The Bill’s measures therefore provide insufficient protection to leaseholders from remediation costs.

· The LGA has been calling for several years for the Government to fund remediation costs in the first instance and to then seek to recoup those costs from those responsible. We echo the HCLG Select Committee’s call in its pre-legislative scrutiny report for proposals for funding all historical building safety remediation works. These proposals should impose no costs on leaseholders and explicitly acknowledge that in the short term the Government must foot the bill, until such time as mechanisms for cost recovery have been developed.

· The Prime Minister told Parliament earlier this year that the Government was determined that no leaseholder should have to pay for the unaffordable costs of fixing safety defects that they did not cause and are no fault of their own. The Building Safety Bill is the perfect opportunity to deliver on that commitment.

· While the relatively low likelihood of fire in individual buildings can never justify ignoring the failure of developers to construct homes that are compliant with the requirements of the Building Regulations, or failing to check that they have done so, remediation can be made more affordable. It is important that a proportionate approach is taken to addressing fire safety flaws once they are found – for example, it may be that in some buildings automatic fire suppression system provision is cheaper and as effective as replacing cladding.

· The Bill should be amended to contain specific provision for a fund to cover the initial costs of remediating – through a proportionate approach - fire safety defects that are not the fault of leaseholders.

· It should amend the Defective Premises Act to allow the Government to act on behalf of leaseholders and freeholders where it has covered these costs.

Burden on the Housing Revenue Account

· The Government has made large sums available to remediate dangerous cladding on buildings over 18m. However, this money is only available to social housing providers in the limited case of ACM cladding or to alleviate the proportion of the costs of replacing non-ACM dangerous cladding systems that would otherwise be passed on to leaseholders.

· The LGA is concerned that in the absence of government financial support to councils, remediation costs will fall on the housing revenue account. This will reduce the amounts available to meet the Government’s ambition for improvements to social housing and the provision of new housing. Leaving social housing tenants and those on the waiting list to pay for twenty years of industry failure.

· LGA-commissioned research by Savills estimated that the total costs to deliver compliance with the highest safety standards, including the installation of sprinklers and compartmentation across the entire HRA council housing stock , at £8.1 billion over a 10-year period , with the majority of the investment taking place in the first five years.

· To achieve full compliance with current standards alone is estimated to be a total of £2 billion over the same period. These costs include the remediation of dangerous cladding .

 

· The Bill – together with the reform of fire safety regulation arising from the Grenfell Tower Inquiry recommendations – imposes significant ongoing costs on landlords, which in councils’ case will also fall on the housing revenue account (and leaseholders) adding to the difficulties referred to above.

· Any funding to cover remediation costs that would otherwise fall on leaseholders above should also protect social landlords and tenants.

· The costs imposed on councils as landlords by the Bill and by fire safety reform need to be covered by new burdens funding.

Scope of the Bill

· The current scope for defining higher risk buildings as those over 18 meters or 6 storeys is too simplistic. Height is only one factor in determining risk. Others include issues such as the vulnerability of occupants; the number of protected means of escape; the provision of fire alarms and automatic fire suppression systems; and the means of construction.

· We have already seen serious fires at the Cube student residence in Bolton, in Barking and Worcester Park and at a care home in Crewe, among others, which have demonstrated the very real danger that the failings of modern construction pose to residents in buildings under 18m. We accept that extending the whole of the higher risk regime to cover all buildings over 11m is not something that can be done immediately. However, the Gateways that will provide the regulator with oversight of the design and construction of residential buildings could be extended to cover a wider set of buildings. It would be of merit to extend coverage to all buildings with more than one dwelling (except for minor works) or simply all residential buildings over 11m, with these powers resting with local authority building control where buildings are below 18m, to ease the burden on the new regulator. This would work to prevent the accumulation of dangerous buildings just under the 18m threshold.

· The Bill contains provision for its scope to be extended but we are concerned that without a clear timetable for this expansion, the requirement in the Bill for the regulator to monitor the scope of the regime continuously will not ensure the capacity required to make such an extension possible is provided. Such expansion should be on a risk-prioritisation basis.

· The extension of the Bill’s system of Gateways to cover care homes and hospitals over 18m will add very few buildings to the scope of the Bill and as residents are especially vulnerable, these types of buildings should be added to the scope of the high-risk regime irrespective of height.

· Our preference as set out in the key issues section above is to expand the system of Gateways to cover all multi dwelling blocks (with the Local authority as the building control authority to enable the new regulator to concentrate on buildings over 18m). Our preference is also using the Building Prioritisation Tool that has been developed to aid commencement of the Fire Safety Act, (expanded to cover structural issues) to prioritise existing buildings for inclusion in the higher-risk regime.

· If this reshaping of the Bill is considered too radical, we would like to see as a minimum:

o The extension of the Bill’s protection to those buildings under 18m that require it based on risk to be hardwired into the legislation by setting a clear timetable for such expansion on the face of the Bill.

o The inclusion of all new care homes and hospitals in the system of Gateways.

Councils as Accountable Persons

· Significant details of the new regime are dependent on secondary legislation absent from the Bill. It is essential that drafts of these are available to the MHCLG committee and to Parliament as it considers the detail of the Bill and to those, such as the LGA, who wish to comment on aspects of the regime not covered on the face of the Bill. If the new regime is to operate as a coherent whole, it should be considered as such by Parliament.

· The Bill was accompanied by a transition plan. It remains to be seen how realistic its timetable is. An extensive programme of engagement with duty holders will be required to ensure landlords are able to meet their obligations under the new system, which accompanies significant new duties under the Fire Safety Act. While these changes are necessary and supported by the LGA, social housing providers need support in adapting to them and time to do so under an adequate transition plan. Issues that need to be covered in this process include:

1. Where accountability will sit in local authorities. We would like to see this stated clearly at committee stage so that councils can begin to plan.

i. One reason for this is that the concept of the Responsible Person under the Fire Safety Order (FSO) needs to be aligned with that of the Accountable Person in the Building Safety Bill in order to ensure that they are one and the same. Similar issues may arise in relation to two new roles that may be created as a result of the social housing white paper: a ‘nominated senior officer’ responsible for Health & Safety Compliance and another ‘nominated senior officer’ responsible for consumer standards compliance.

ii. This issue is further complicated by the possibility that an Accountable Person may be responsible for a building where activities outside of their control, such as retail, are taking place. This could see several Responsible Persons under the Fire Safety Oreder in one building and an Accountable Person with no equivalent under the Building Safety Regime in the non-residential section.

iii. Our members who have Arm's Length Management Organisations (ALMOs) have raised with us the need for clarity on whether the role of Accountable Person should sit in the councils or the ALMO and if it sits in the councils whether this should be a corporate role or a role that should be assigned to a specific individual. ALMO Management Agreements delegate significant control over the management and maintenance of buildings to the ALMO. Overlaying this arrangement with the new Principal Accountable Person role, will potentially create split lines of responsibility for the management of some buildings with the council involved in direct oversight of building safety and the ALMO responsible for everything else. Similar issues may arise in respect of buildings subject to Private Finance Initiatives where ownership gradually transfers back to the local authority.

2. The Golden Thread may prove difficult to establish without intrusive surveys like Type 4 fire risk assessments. While we support the need for the Golden Thread to ensure owners properly understand their buildings, it is important that the time this will take, and the cost involved are properly understood.

3. There are issues with the Accountable Person’s right to access individual flats in order to carry out their duties. The duties on residents and powers provided in clauses 95-97 do not go far enough. Applying to the County Court for a right to access is a significant strain on resources and finances of local authorities. The sector has raised this issue on several occasion in the past and the Government needs to consider it further as the current proposals do not go far enough.

4. Our members need clarity as soon as possible on the changes that will be required to leaseholder engagement and the format of safety cases. The urgency with which this clarity is required depends on the timescale of the transition period. In particular, experience so far suggests that the safety case approach is one that housing providers are unfamiliar with and require significant training to be able to undertake.

5. The LGA supports a developer levy to ensure that the industry pays the costs of rectifying its failure to meet adequate standards in the past. This levy must not however fall on social providers if they are to be able to deliver the improvements and additions to the housing stock the Government requires.

Councils and fire services as regulators

The conflict between the new building safety system and the planning white paper.

· The LGA remains concerned that Permitted Development Rights (PDR) may undermine the effectiveness of the system of Gateways proposed in the Bill. For example, the government has already taken steps to require those extending buildings over 18m to demonstrate that the buildings cladding system is safe before commencing work. However, this does not apply to buildings under 18m that will be over 18m once they have been extended.

· Office to residential conversions have a poor record in terms of fire safety, in part because developers can avoid subjecting parts of the building that they do not work on to the same scrutiny under the building regulations that apply to parts that are subject to new work, even though the building must operate safely as a whole in the event of fire.

· The government needs to ensure that no loophole is left unclosed that could allow Permitted Development Rights (PDR) to bypass the provisions of Gateway One or the rest of the new regime. We remain concerned at the impact of PDR on fire safety in buildings under 18m.

· The Bill should be amended to specifically require any permitted development that results in a building that would be in scope if newly constructed, passing through all three Gateways with the Building Safety Regulator as building control authority.

The adequacy of the product safety provisions

· The LGA’s experience of the product testing system as it applies to fire doors is that there is a lack of capacity, a lack of choice and a high cost. In addition, when test houses get advice wrong, there seems to be no effective recourse for manufacturers and their customers. The Bill does not address these issues.

· In our experience tests do not always reflect real-world conditions. For example, the BS 8414 cladding system test takes too little account of proven installer incompetence, the effect of wind and of smoke toxicity; fire door testing makes too little allowance for the effect of daily use. The 8414 test is also too vulnerable to manipulation and fraud – especially when assessments in lieu of tests (‘desktop studies’) are permitted - and standards are not always clear, for example confusion around what ‘Class 0’ means.

· When products fail it is virtually impossible to get redress from manufacturers who can simply cease trading and when test houses provide bad advice there appears to be no redress. Both issues have been raised in relation to fire doors. Customers struggle for clarity as manufacturers hide behind commercial confidentiality.

· In our experience (further informed by conversations with ACTSO), trading Standards services are not currently armed with either the resources or the powers to take on large product manufacturing firms. Unless this changes the Bill will fail to provide an effective system. Cases can drag on for multiple years as defendants seek to exhaust the prosecuting authority’s resources, while testing is cost prohibitive for many local authorities - the costs of testing fire doors can run into tens of thousands of pounds.

· In addition, too often, trading standards authorities have found themselves caught between costly and complex arguments between test houses about the correct approach to testing, which juries cannot be expected to resolve.

· Often the safety of construction products depends on the context of their use (for example a cladding product that is fine on a bungalow may not be acceptable on a high-rise building). The product safety system therefore needs rigorous join-up with building control regulation.

· An effective product safety system must deliver real consequences for the owners and managers of companies that miss-sell products.

· The product safety system in the Bill must provide a national prosecution funding resource, a single national test system, adequate officer training, effective links to building control and effective deterrents against miss-selling and misuse.

The limited removal of competition in building control

· The failure of the building safety system that this Bill seeks to remedy owes much to the ability of duty-holders to choose their building control regulator. The Bill rightly removes this, but only in relation to buildings deemed in scope. We share the view expressed by the Housing, Communities and Local Government Select Committee during its pre-legislative scrutiny of the Bill that ‘duty holder choice [should] be removed entirely from the building control system and replaced by a system of independent appointment’.

· Compliance with regulation cannot be a commodity and local authority building control should not be left to tackle non-compliance in buildings over 18 metres while simultaneously having to compete with private businesses for work in out-of-scope buildings, often owned by the same developers.

· This shortcoming in the Bill could result in local authority building control being starved of work on buildings that are not in scope. This in turn could result in the decline of local authority building control functions, to the point where they are no longer able to deliver the Bill’s objectives in relation to in scope buildings. Our proposals to extend the Gateway system would address this issue by preventing developers from choosing their regulator, while still allowing them to pay Approved Inspectors for advice.

· In addition, the Building Safety Regulator can appoint Approved Inspectors to conduct its functions. While we have been told the presumption will always be to use local authority resource, this should be required on the face of the Bill to protect the significant investment in building control teams local authorities will be required to make as a result of the Bill.

Funding

· We agree that the regulator should be able to charge for its activities and be funded through cost recovery. However, the costs arising from the establishment of the regulator will not be covered by this approach and must be properly funded.

· The LGA is concerned that discussions over the funding of the necessary expansion in fire, building control and environmental health competence and capacity to deliver the work of the BSR are not yet complete. We recognise that the Government has to balance the cost of this capacity expansion within the wider spending picture; however, we would welcome ministers recognising that if they spend less this will impact capacity. This will mean that the process of reviewing safety in existing high rise buildings – already scheduled to take five years – will take longer.

· We are concerned that underfunding could delay the expansion of the scope of the higher-risk regime, leaving large numbers of dangerous buildings under 18 meters under-protected. We want to see a commitment to sufficient funding for this expansion. This is one of the reasons why we feel there should be a commitment to expansion on the face of the Bill.

· The structure of the Building Safety Regulator means that its enforcement and inspection activity will, in practice, be conducted by councils and fire and rescue services.

· Clause 27 of the Bill allows the Secretary of State to make regulations allowing the Building Safety Regulator to charge fees and recover costs. The levels may be set in regulations or by the Regulator (in the latter case the regulator will be expected to publish its charges).

· Clause 15 allows the Secretary of State to make regulations allowing for Fire and Rescue Services and councils to be reimbursed for Building Safety Regulator work and it empowers the Secretary of State to decide what is an appropriate amount.

· In our experience, where central government sets fees and charges nationally, cost recovery does not work, and this results in a series of local shortfalls. One example is the planning system, where councils have been subsidising building developers by hundreds of millions each year because they must use the national charges set by the Secretary of State which do not cover their costs.

· Similar issues also exist within the licensing fees regime. Fees under the Licensing Act 2003 have remained at the level set by the government when the Act first came into effect in 2005. Whilst the intention of the Act (in common with other licensing frameworks) is for fees to achieve full cost recovery for licensing authorities, concerns have been raised ever since the Act was first introduced that councils are experiencing a shortfall in licensing fee income relative to costs. Evidence from an LGA survey in 2016 appears to confirm that authorities are not covering the costs of administering the Act and are running a deficit. This deficit is estimated to cost a total of £10.3 million every year.

· We therefore do not want the Secretary of State to set the levels of charges, these should instead be worked out locally. This could be agreed between the Health and Safety Executive, councils, and fire services. If the Health and Safety Executive is not satisfied that local regulators are charging correctly, it can raise this in its annual reports and request direction from the Secretary of State, so there are already safeguards in place.

· If the regulator must publish a set of charges, there is a risk that this will not allow for legitimate differences in costs between different council areas. If the charging scheme set out in the Building Safety Bill does not allow local regulators to recover costs and this will act as a deterrent, undermining the policy objectives of the Bill.

· We have raised these issues with the Government and the HSE team developing the charging proposals and continue to work constructively with officials to find the best possible approach.

Competence and Capacity

· We support the Bill’s proposals for stronger oversight of competence in the building control profession and agree that these should apply equally to the private sector and local authorities. To that end, we support the use by councils of LABC (Local Authority Building Control) independently audited Quality Management System.

· In addition to the question of fees and charges for day-to-day work, there will be considerable cost both to the Health and Safety Executive and to local regulators in setting up the Building Safety Regulator. This will include training and the provision of extra staff. The National Fire Chiefs Council has been given some funds to improve protection services and some of this has been passed to fire services. Councils have yet to receive funding for the improvements that will be required.

· One of the challenges we are most concerned about in building safety is the lack of expert capacity to address safety issues. This includes a lack of fire engineers, a shortage of surveyors and assessors with sufficient knowledge of both high-rise structural safety and cladding systems, and the difficulty in obtaining Professional Indemnity Insurance experienced by those who do have expertise in these areas. This lack of capacity could delay the implementation of the Bill and limit its scope. As we argued in response to the Bill’s initial publication a year ago , the UK needs to invest in addressing this skills shortage as soon as possible.

· We remain concerned that the role, capacity, and funding of the environmental health element of multi-disciplinary teams has not yet been established. It is difficult for the LGA, as a representative of councils employing the relevant staff, to ensure that government provides sufficient training and funding when we do not yet know what the requirement will be. We will continue to work closely with HSE and MHCLG on this issue.

The Government needs to invest in the necessary skills to ensure the new regime is effective and to allow reimbursement charges to be set locally.

September 2021

 

Prepared 21st September 2021