Building Safety Bill

Written evidence submitted by AXA UK (BSB33)

Public Bill Committee

Building Safety Bill

Legislative Scrutiny

1. AXA UK (AXA) is part of the AXA Group, a worldwide leader in financial services, operating in 54 countries with over 153,000 employees and 104 million customers. AXA UK has around 8 million customers and operates through specific operating companies – AXA Insurance and AXA Health. AXA UK is one of the largest UK residential and commercial property insurers.

Executive summary

2. AXA welcomes the opportunity to provide our input into the Public Bill Committee’s legislative scrutiny of the Building Safety Bill.

3. The publication of the Building Safety Bill is a welcome and necessary step towards significantly improving the regulations around building and fire safety in England. AXA has long called for government to deliver fundamental reform of the regulatory framework to strengthen oversight across the entire lifecycle of buildings, improve clarity in the responsibilities of all duty holders and ultimately, better protect lives and properties.

4. As one of the largest property insurers in the UK, AXA is acutely aware of the importance of managing building safety risk appropriately and has previously engaged with the Government throughout numerous reviews of building and fire safety legislation, including by responding to the Home Office’s Fire Safety Consultation and providing evidence to the HCLG Select Committee pre-legislative scrutiny inquiry and contributing to the content of the Bill.

5. AXA recognises that this Bill is being introduced to Parliament at a time of real stress and anxiety for leaseholders that remain living in buildings covered in flammable cladding awaiting remediation. AXA continues to work with existing customers to ensure insurance cover can be provided in a coordinated and equitable way and is supporting the Association of British Insurers in its engagement with the Ministry for Housing, Communities and Local Government around potential solutions for those leaseholders experiencing increases in premiums while they wait for cladding to be remediated.

6. It is crucial industry, Parliament and Government work together to ensure building safety legislation delivers fundamental reform of the building regulatory regime and restores confidence in the wider built environment. AXA’s Property Teams look forward to supporting stakeholders as the Bill progresses through Parliament and working with the new regulator once established. AXA strongly believes that following sufficient reform of the building regulatory system and expediated remediation of dangerous cladding, the risk profile of high-rise high-risk buildings should significantly improve.  

7. To a large extent the legislation provides sufficiently robust construction industry oversight across the life cycle of buildings and greater clarity in the responsibilities of all dutyholders. However, AXA would urge the Government to review some aspects of the Bill. In particular, AXA would urge caution on the reliance on unpublished secondary legislation, the lack of detail on the new product testing regime and ‘ G olden T hread’ provisions and the emphasis on height as the key determinant of risk .

 

AXA UK Response

Welcome step forward

8. Buildings insurance is based on risk-reflective pricing and the Hackitt Review’s conclusion that the current regulatory system is ‘not fit for purpose’ led to a loss of confidence in the safety of the UK’s built environment. The current regulatory approach has led to confusion around roles and responsibilities, industry competence and the storing of critical information that support assessment of safety risk.

9. AXA therefore considers the publication of the Building Safety Bill a welcome and necessary step towards significantly improving the regulations around building and fire safety in England. AXA has long called for government to deliver fundamental reform of the regulatory framework to strengthen oversight across the entire lifecycle of buildings, improve clarity in the responsibilities of all duty holders and ultimately, better protect lives and properties. AXA is particularly supportive of the new regulator, including its overarching objectives and the strength of its enforcement powers, the ambition to develop a ‘Golden Thread’ of information throughout a building’s life, the requirements for Building Assessment Certificates and Safety Case Report, and the inclusion of a product testing regime.

10. AXA strongly believes that following sufficient reform of the building regulatory system and expediated remediation of dangerous cladding, the risk profile of high-rise high-risk buildings should significantly improve. AXA would urge government to increase the pace of cladding remediation alongside this legislation and to consider an extension of the Building Safety Fund to cover wider fire safety defects.

Scope

11. Government defined its policy intentions in its Impact Assessment as "to reform the building safety system to improve building safety and performance for all buildings and to establish a more stringent regime to strengthen the management of fire and structural safety risks for new and existing buildings in scope". While the draft Bill goes some way in realising that ambition, to use residential buildings of 18 metres or more in height or more than seven storeys (whichever is reached first) as an intended definition of buildings within scope may not sufficiently provide the building safety improvements for all buildings at high fire risk.

12. In determining the definition of a ‘high-risk’ building, AXA believes the legislation places too much focus on height. In recent years, there has been numerous examples of buildings that would be outside of scope of the Bill that have presented significant high-risks to the occupiers such as the Worcester Park Fire and the Crewe Care Home Fire . Fire risk consideration should consider a wide range of factors such as the vulnerability of those using the building and the construction materials used . AXA strongly believes there is an opportunity through this legislation to fundamentally reform the built environment in England and to ensure there is consistency in regulatory measures for buildings at high fire risk. To that end, AXA would welcome consideration from government on how this legislation can be sustainably expanded to cover other high-risk properties at any height. The provision of an indicative timeline for gradual expansion of the Bill’s scope would be one way to reassure stakeholders this will be addressed.

13. Less is currently known around the construction materials used on medium-rise and low-rise buildings. Primarily because there has been less appetite and need for full façade assessment reports in these types of buildings. A comprehensive database that definitively stored full construction details on smaller buildings would be extremely useful for ensuring safety and providing confidence for residents and insurers.

Implementing the Golden Thread

14. AXA is extremely supportive of the robust provisions in the Building Safety Bill around the ‘ G olden T hread ’ of i nformation and the safety case approach . The preservation of the ‘Golden Thread’ together with the mandatory reporting requirements, combined with the increased sharing of information introduced by the Bill, should assist insurers and risk surveyors in better understanding the risk they are being asked to underwrite and survey.

15. However, the Bill lacks detail on how ‘Golden Thread’ information will be recorded and stored. Insurers will be reliant on access to this information such as safety case documentation to support their understanding and rebuild their confidence in the safety of individual in-scope buildings. Regulations and process for the safety case will need to be robust and clear, giving time for the industry to understand how the new system will be applied.

16. Furthermore , there are some challenges which may delay or inhibit implementation. For example, there is a potential challenge for applying these provisions retrospectively for existing buildings. For many existing buildings there is limited information available on the construction material used for the property and it is often a costly exercise to conclusively find this information out. This challenge will be exacerbated further should the provisions be extended to buildings of less than 18 metres, where there is even less knowledge of the construction materials used. An issue particularly acute for the UK where 80% of UK buildings in 2050 have already been built today. AXA urges government to detail the information safety case reports will be required to contain, ensuring there is sufficient time for parliamentary scrutiny and issuing clear guidance to support property owners in providing sufficient information.

17. The Government will also need to ensure that property owners have the resources and support available to ensure that the ‘Golden Thread’ of information can be created and maintained.

Third-party certification and registration of construction professionals

18. Dame Judith Hackitt’s review identified a fundamental shortfall in the competency of individuals during the lifecycle of buildings. AXA has consistently called for third-party certification to be widely adopted across the construction sector as independent accreditation of competence and management control can demonstrably improve outcomes and raise standards. For insurers, third-party accreditation would instil greater confidence in industry competence and bring consistency to the legislation.

19. AXA welcomes government’s collaboration with industry on this issue and the launch of the British Standards Institute’s Competence Standard Programme to provide a basis for third party accreditation of building safety competence, with requirements to be laid around the roles of Principal Designed, Principal Contractor and Building Safety Manager. While welcoming the Government’s intentions to move towards a competence-based scheme, AXA continues to call for the Bill itself to include provisions to establish a national system of third-party accreditation and registration of all professionals working on the design and construction of higher-risk buildings. AXA firmly believes this provision would improve transparency and public trust.

20. Evidential competency is incredibly important to improve the safety of all buildings and instil confidence that those assessing and working in the built environment are capable of discharging their duties effectively. Competence can only be guaranteed if it is measurable and clearly defined in both guidance and legislation.

21. It is particularly important for government to mandate a requirement for UKAS Accredited Third Party Certification and registration of fire risk assessment providers for premises covered by Building and Fire Safety Legislation . As a large UK insurer in the property and construction sector, AXA is acutely aware of the importance of ensuring there is a clear and consistent approach in place for fire risk assessments. Quoting Government guidance , "third-party certification schemes for fire protection products and related services are an effective means of providing the fullest possible assurance, offering a level of quality, reliability and safety that non-certificated products may lack". This is even more important considering the increased provisions under the renewed Fire Safety Order for fire risk assessments where they must now include the building’s structure, external walls, balconies and flat entrance doors. These measures will improve the ‘Golden Thread’ and will aid enforcement when non-compliance occurs. It also focuses the minds of all individuals and organisations operating in this domain to the importance of their functions and roles.

Product Testing Regime

22. AXA welcome s measures in the Bill to establish a new, independent construction products regulator , to create a statutory list of safety-critical applications and product systems and the announcement of an independent review into testing . However, while the Bill lays out an important framework for the accountability and regulation of construction products, there remains a lack of detail on the testing which is needed to ensure products are safe. Testing is incredibly important to ensure construction products meet the appropriate standards. AXA remains in agreement with many of the recommendations outlined by the Housing, Communities and Local Government Committee in its Pre-legislative Scrutiny of the Draft Building Safety Bill around the implementation of a new product testing regime. In particular:

- Government should publish proposals for improving the product testing regime: There is currently a lack of transparency in the current testing regime as noted clearly in the Hackitt Report and government is yet to address how they intend to improve the regime to support stakeholders in determining the risk status of construction products. AXA would welcome further clarity on product testing in the regulatory framework considering its integral importance to the ongoing safety of the built environment.

- Government should provide for the publication of test failures and re-run tests and establish an independent and unified system of third-party certification : To improve transparency in the product testing regime the Bill should include provisions that require the publication of test results and install a system of third-party certification which benefits from extensive oversight . When reviewing the product testing regime, AXA would encourage government to include provisions for a central open database that lists the status of all products in scope of the testing regime. In addition, and a s outlined elsewhere in this response, evidential competency accredited by an independent organisation is the only measure that can provide real transparency and credibility in the system and support end customers to verify that materials used in construction are safe.

- Testing regime should consider products as parts of systems: The current proposals from Government suggest that the testing regime will place greater emphasis on individual products rather than treating products as parts of systems. To properly assess fire risk, it is vital that testing goes beyond the stand-alone performance of individual products and considers how the product interacts with other elements of construction in a real-world environment . The regime should include provisions that ensure there is sufficient examination of safety-critical applications and product systems.

Other considerations for Government

Professional Indemnity Insurance

23. The creation of new professional dutyholders and increased levels of responsibility that will sit with building owners, managers and other construction professionals will have an impact for the insurance sector. For these proposals to be implemented successful, there needs to be available insurance for dutyholders. However, t he Professional Indemnity Insurance (PII) market has hardened across a number of professions following the Grenfell Tower tragedy, which may act as an inhibitor to this legislation.

24. Government should continue to assess how the new provisions will potentially impact the PII market and the availability of cover for construction professionals . The PII market tends to work effectively when the laws governing liability and compensation are maintained within the well-established body of law relating to professional negligence as that law is evolved by the courts. However, the market is less effective where government seeks to provide a non-rules based or ‘fast track’ means of establishing liability and compensation. The proposed extension of limitations periods applied retrospectively to claims under the Defensive Premises Act may therefore cause some challenges for the market, particularly with regard to Professional Indemnity insurer’s meeting their regulatory responsibility to properly assess and price exposures. Re-establishing confidence in building safety for all stakeholders across the construction industry will be crucial for implementing the provisions within the Bill.

25. In line with the aforementioned challenge , the chronic shortage of fire engineers, surveyors and other construction professionals with similar expertise in the UK will need to be addressed to ensure the successful implementation of the Building Safety Bill and the Fire Safety Act. AXA is supportive of the Local Government Association’s call for the Government to put forward measures to increase degree, conversion and apprenticeship schemes to address this shortfall, as without greater expert capacity the building and fire legislation may fail to be implemented effectively.

Sprinklers and automatic fire detection systems

26. AXA urges government to supplement the new Building Safety Regime by introducing robust requirements for mandatory installation of sprinklers and automatic fire detection systems in newly built, high-risk buildings at any height, particularly for those buildings which accommodate vulnerable people e.g. care homes, student accommodation and hospitals or are a form of Modern Methods of Construction ( MMC ) .

27. As continually raised by the UK’s Fire and Rescue Services, fitting sprinkler systems needs to be a priority, they aren’t an add-on, but a lifesaving, property protecting essential. The ABI commissioned the Fire Protection Association to research suitable standards which resulted in the publication of a publicly available technical guidance note which AXA would urge g overnment to consider as the regulatory framework evolves.

Health and Safety Executive

28. AXA believes the Building Safety Regulator being contained within the Health and Safety Executive (HSE) is sensible, primarily because HSE has strong competency at developing regulation and monitoring and enforcing potential breaches of legislation. However, building and fire safety regulation was not previously within HSE’s remit. Given the wide-ranging nature of the regulation being brought in through the Building Safety Bill, which could apply to approximately 13,000 buildings ( Impact Assessment 2020 paragraph 28), the Government must ensure that HSE is able to bring the necessary expertise into their organisation and is resourced to ensure it can deliver on its new responsibilities.

29. AXA welcomes the intention of Government to ringfence funding for HSE and local authorities for those functions of the regulator that cannot easily be financed by the market and the confirmation in the Impact Assessment that costs will be partially offset by fees and charges raised from regulated parties . AXA urges government to publish further information around the details of the charging regime and its plans for ringfenced funding of HSE for the next multi-year spending period. T he success of the Building Safety Programme to a large extent impinges on sufficient resources being available for the HSE and local authorities from the outset.

Modern methods of construction (MMC)

30. MMC such as light-weight timber frame, are becoming increasingly common and innovative construction appears to be leading the way with new developments. AXA believes government should consider the growth in the use of MMC and the long-term resilience to structural damage that these buildings present and include them in the scope of the regulation and other building and fire safety regulations.

31. Whilst traditional methods of construction are well understood, and repair s can be completed by a wide range of contractors, forms of MMC have been evidenced to have clear risk and vulnerability to fire and challenges to reinstate or repair. Given the potential safety risks attached to MMC, there is an argument for ensuring that the type of regulation and enforcement contained within the Building Safety Bill is extended to include MMC buildings of any height. In particular, ensuring there is rigorous independent testing of MMC materials.

32. In addition , AXA believes there is a case for a publicly accessible database of buildings developed using MMC. A publicly accessible database would improve the level of information available to consumers, fire and rescue services and insurers around the long-term durability, repairability and resilience of buildings of this construction. The Building Safety Bill provides a legislative vehicle in which to implement change which can ready the UK for new and innovative forms of construction methods.

September 2021