Building Safety Bill, Report Stage, House of Commons, 19 January 2022

No leaseholder should have to pay the costs of making their homes safe and the Secretary of State’s threat to use the legal system to ensure developers meet their responsibilities to leaseholders is a positive step in the right direction. However, leaseholders are not the only innocent victims of the construction industry’s failure to build safe homes.


Key messages

  • The LGA welcomed the introduction of the Building Safety Bill. We are confident that 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 views on the Bill are dealt with under separate headings below.
  • Through our debate briefings, written and oral evidence to the Public Bill Committee, and briefing work at Second Reading of Building Safety Bill, we have continually sought to strengthen the Bill for both local authorities and residents.
  • We maintained that the most controversial aspect of the Bill was the question of who pays to remediate the consequences of twenty years of systemic failure in building safety. And therefore, the LGA largely welcomed the announcements from Michael Gove (Secretary of State for Levelling Up, Housing and Communities DLUHC) and the subsequent amendments relating to protections for leaseholders.
  • No leaseholder should have to pay the costs of making their homes safe and the Secretary of State’s threat to use the legal system to ensure developers meet their responsibilities to leaseholders is a positive step in the right direction. However, leaseholders are not the only innocent victims of the construction industry’s failure to build safe homes.
  • The construction industry must also be made to fix the fire safety defects it has built into blocks owned by councils and housing associations. Unless the Government forces the industry to act – or provides taxpayer funding – we are concerned that the costs of fixing social housing blocks could fall on council housing revenue accounts and housing associations, punishing social housing tenants and those on the waiting list.
  • The Bill establishes a Building Safety Regulator (BSR) within the Health and Safety Executive (HSE) to implement the new, more stringent, regulatory regime for higher-risk buildings (defined as residential buildings over 18 metres. Care homes and hospitals over 18 metres are also covered at the design and construction stage). The BSR will oversee the safety and performance of all buildings and assist and encourage competence among the built environment industry, and registered building inspectors.
  • New buildings will have to pass through three regulatory ‘Gateways’ in relation to safety – at the planning stage, at the final design stage (before construction can begin) and immediately before occupation when construction is complete. Although we support this change, its introduction, and the associated removal of the right of developers to pick their own regulator risks creating a two-tier building safety system in which developers of blocks under 18 metres remain free to pick their own regulator.
  • In occupation, buildings will need to be registered with the BSR and will require a safety case. The Accountable Person (AP) (essentially the owner or managing agent) will need to maintain a ‘Golden Thread of Information’ about the building and submit a safety case to the BSR. The AP will have a duty to listen to residents who raise building safety concerns – and if residents feel ignored, they can raise issues with the BSR.
  • The BSR will rely on councils and fire and rescue services to deliver the regime for higher-risk buildings. The Bill places the HSE and local regulators under a duty to cooperate and gives the HSE the power to direct councils and fire services. The latter power is to be used only in exceptional circumstances and the Bill provides safeguards to prevent it becoming a default option.
  • The Bill also brings about a number of new burdens for councils. Firstly, the current BSR structure means enforcement and inspection activity will, in practice, be conducted to a large degree by councils and fire and rescue services. While there are cost recovery mechanisms in the legislation, evidence from an LGA survey in 2016 appears to confirm that authorities do not generally cover the costs of administering new regulations. We therefore believe that levels of charges should be worked out and set locally.
  • We are concerned that the Government may not fully fund the expansion of regulatory capacity the Bill requires if it is to work. As a result, either the new regime will be ineffective or other areas of regulatory activity will suffer as resource is focussed on high rise buildings, especially in the fire sector.

ADDITIONAL INFORMATION:

Levelling Up Secretary’s Amendments to the Building Safety Bill (January 2022)

This section is relevant to amendments (11 to 72, NC19 to NC22 and NS1 and NS2), tabled by the Government following Monday 10 January statement from Secretary of State Michael Gove.

  • The key pledge was that no leaseholder in a building over 11 metres (4 storeys) high will have to pay to fix cladding problems. The LGA has been calling for this for some time. This is a significantly positive announcement for councils and for leaseholders themselves.
  • We also welcome that the loans for leaseholders in 11-18 metre blocks announced last year will be scrapped.
  • We hope the Bill’s extension to 30 years of the statutory right to sue developers will deliver greater security to leaseholders. We remain to be convinced that this will work given the lack of actions under the Defective Premises Act to date.
  • The Government’s support for a proportionate approach to remediation, including the use of sprinklers, is something the LGA has previously called for.
  • We welcome the announcement that before Easter there will be an indemnity scheme for those conducting surveys on external wall systems, the ongoing work to reduce leaseholders’ insurance costs and the establishment of a dedicated team to pursue those who have put lives at risk are measures.
  • While these are positive steps in the right direction, we are concerned about the lack of action taken to protect social housing tenants and those with non-cladding related issues.
  • The LGA maintains that a large percentage of building safety risks are a result of non-cladding issues. We would welcome the opportunity to work with the Government to remedy this issue.

Amendment 75, NC24 and NC25, tabled by Daisy Cooper MP

We have been working with LGA Vice-President Daisy Cooper MP to table amendments to the Building Safety Bill that both protect councils from additional burdens and protects residents in properties not covered by the scope of the Bill.

Amendment 75

  • Amendment 75 will make social housing providers exempt from the additional financial burden of the government's proposed levy, to prevent council tenants from subsiding the failures of private developers. 
  • Clause 57 of the Building Safety Bill gives the Secretary of State powers to impose a new Building Safety Levy in England, that will contribute towards the Government’s costs for remediating historical building safety defects.
  • This will apply to developers making an application to the Building Safety Regulator for building control approval, the new “Gateway two” process to be introduced in building regulations. However, it will also be imposed on councils who are already facing additional financial pressures due to COVID-19.
  • Imposing this levy on councils means council tenants will be subsiding the failures of private developers and paying the cost both of remediating council housing and private housing.
  • If the Levy is imposed on councils it will increase the cost of building or refurbishing social housing or increase rents, yet the benefits to funds will not be available to the tenants who would otherwise have benefitted from lower rents or better housing.
  • The LGA therefore supports amendment 75 tabled by Daisy Cooper MP that will make social housing providers exempt from this additional financial burden.

NC24 and NC25

  • NC24 and NC25 will ensure that the more stringent building safety framework applies not just to buildings over 18m, but also to those under 18m where those buildings are multiple occupancy dwellings. 
  • The Building Safety Bill in both its original draft and the draft as amended at Committee Stage fails to robustly confirm whether the Gateway system will apply to buildings under 18 metres where there are multiple occupancy dwellings.
  • This will create a two-tier system where buildings below 18 metres will face less rigorous safety regulations than buildings over 18 metres.
  • NC24 and NC25 tabled by Daisy Cooper MP will ensure that Gateways 2 and 3 are applied to multi-occupancy dwellings under 18 metres not just buildings over 18 metres. The LGA supports these amendments.
  • If these amendments pass, to avoid issues with capacity that may arise for the Building Safety Regulator (BSR), for buildings under 18 metres, the local authority would be the building control authority, not the BSR. Local Authority Building Control will cover the operation of the Gateway system at all heights below 18 metres.
  • The amendment also removes the ability for developers to pick their own regulator for multi-occupancy buildings under 18 metres because Local Authority Building Control (LABC) will be the sole regulator. This prevents a two-tier system developing in building safety.
  • The amendment removes concerns that the Government may fail, or take a long period of time, to expand the higher-risk regime to include more buildings.

Funding remediation

The Government has made large sums available to remediate dangerous cladding on buildings over 18 metres. However, this money is only available to social housing providers in the limited case of ACM cladding or to alleviate costs that would otherwise be passed on to leaseholders. A significant proportion of the fire safety failures uncovered in the wake of the Grenfell Tower disaster are not related to cladding and the Government has so far refused to fund these.

In the social sector this will prevent councils and housing associations from making a greater contribution to providing the housing the nation requires, improve the existing housing stock to modern standards, meet energy targets and make buildings safe.

The alignment of the Bill and the Fire Safety Act

The effect of the Bill cannot be divorced from the impact of the Fire Safety Act (FSA) and associated changes to the Fire Safety Order (FSO), for example:

  • The FSA will require building owners to review fire risk assessments on many residential buildings.
  • Regulations will be introduced later this year relating to premises information boxes; personal emergency evacuation plans; fire door checks and lift checks.
  • The FSA and FSO apply to all residential buildings with more than one dwelling.
  • The concept of the Responsible Person under the FSO needs to be aligned with that of the Accountable Person in the Building Safety Bill.
  • For regulators there may be anomalies that arise meaning council or fire service officers can charge for an activity or use a power when acting for the building safety regulator, but not at other times.

Scope of the Bill

  • The LGA has expressed concern about the scope of the Bill, the speed at which its scope can be expanded and the constraints on its expansion. We have argued that height is not an effective determinant of risk and are pleased that care homes under 18 metres are to be included in the new regime.
  • Part 4 (sections 62-7) defines higher risk buildings as those over 18 meters or 6 storeys – this is too simplistic. Height is only one factor in determining risk. Others include issues such as the vulnerability of occupants (care homes tend to have a large proportion of residents who cannot self-evacuate, for example); the number of protected means of escape; the provision of fire alarms; and the means of construction.
  • The problem with the height-based approach is not only that it will omit a number of dangerous buildings from the scope of the regulator, but that it will include a number of less dangerous ones. This will use scarce resource unnecessarily which could be deployed to life-saving effect elsewhere.
  • For example, the current scope would not have covered the Cube student residence in Bolton. In December 2019, the flammable cladding at the Cube rendered the only staircase untenable within half an hour and a resident was rescued from the top floor of the building moments before the flat from which she was rescued was destroyed by fire. This suggests that had the fire taken place later in the evening when more residents were asleep, it would probably have resulted in fatalities.
  • In addition to the Cube, we have already seen serious fires 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.
  • Given the UK’s lack of capacity in building safety we accept that extending the higher risk regime to cover buildings over 11 metres is not something that can be done immediately, but we are concerned that without a clear timetable for this expansion, nothing will be done to provide the capacity required to make such an extension possible.
  • The HCLG (now LUHC) Select Committee called on the Government to set a clear timetable for extending the Bill’s scope, but the Government has argued that as the Bill requires the regulator to monitor the scope of the regime continuously, such a timetable is unnecessary. We believe it is necessary.
  • Requiring the regulator to monitor the scope of the regime does not provide the political will to extend it nor will it provide the momentum required to bridge the skills gap that currently denies residents of lower-rise buildings the protection afforded to others. The case for the higher risk regime extending to buildings over 11 metres (ideally via a definition of high risk that considers additional factors listed above), has already been demonstrated and it is only the UK’s shortage of the requisite skills that justifies the limited scope in the Bill. The extension of the Bill’s protection to those buildings under 18 metres that require it on the basis of risk needs to be hardwired into the legislation.
  • The extension of the Bill’s system of Gateways to cover care homes and hospitals over 18 metres will add very few buildings to the scope of the Bill and there is a case for abolishing the height limit in regard to these buildings.

The adequacy of the product safety provisions

  • ​​​​​​The LGA is concerned to ensure that the Construction Product Regulations dealt with in Schedule 9 take account of recent experience of the failure of the existing system. We have direct experience of the failure of the construction product testing regime in two respects: the testing of cladding systems and the testing of fire doors.
  • 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, and 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. Most testing is cost prohibitive for many local authorities.
  • 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.
  • An effective product safety system needs to be based on reform of the testing system that address these issues; there must be real consequences for the owners and managers of companies that miss-sell products. The new regulator must have real powers and sanctions and the regulatory system must be properly funded. Trading Standards services are not currently armed with either the resources or the powers to take on large product manufacturing firms and unless this changes the Bill will fail to provide an effective system. In addition, too often, even when taking on enforcement action, Trading Standards authorities have found themselves caught between costly and complex arguments between test houses about the correct approach to testing, with no way to resolve them.

Funding

  • We agree that the regulator should be able to charge for its activities and be funded through cost recovery. However, the establishment of the regulator will not be covered by this approach and must be properly funded.
  • 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 metres 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. This is not something we object to, but it does raise two issues. First, over the relationship between councillors and fire authority members who are democratically accountable for their services and the Building Safety Regulator which has separate powers to direct those services. Second, we are concerned that local services may not be adequately funded for carrying out work on behalf of the regulator. We object to the model set out in the legislation.
  • 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 believe that levels of charges should be worked out and set 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 has to publish a set of charges, there is a risk that this will not allow for legitimate differences in costs between different council areas. Apart from regional differences, this may reflect the shortage of skilled fire engineers in the country which could prove more expensive in some places than others.
  • If the charging scheme set out in the Building Safety Bill does not allow local regulators to recover costs this will act as a deterrent, undermining the policy objectives of the Bill. We have raised these issues with the Government and HSE and continue to work constructively with officials to find the best possible approach

Competence and capacity

  • 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. /p>

Contact

Jonah Munn, Public Affairs and Campaigns Adviser

[email protected]