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The introduction of a construction licensing task force

View profile for Perdeep Grewal
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The Federation of Master Builders (FMB) has announced the introduction of a mandatory licensing scheme for UK construction companies. The aim is to transform the sector into a high quality and professional industry.

Liz Peace, the Chair of the Construction Licensing Task Force, said: “Mandatory licensing has the potential to transform our industry into a world-leading sector. Licensing will help drive up standards and help address the issue of quality and professionalism...At the heart of what we are trying to do is increase protection for the ordinary person who engages with the construction sector.”

So what is the current problem?

In July 2018, the FMB published a report identifying the need to enforce consumer rights after building works have gone wrong. The FMB found that 1 in 3 homeowners has been put off doing home improvement works because of fears of hiring an incompetent builder.

An inspection of small refurbishment sites by health and safety inspectors found 49% of sites fell below the standard set for health and safety requirements. The demand for services may be constrained by a lack of regulation. For instance, Experian estimated the economy is missing out on an estimated £9.6 billion of construction activity per year.

What regulatory framework does the construction industry currently have and is it useful?

  • Building Regulations set the minimum standards for design, construction and alteration to buildings. They are periodically updated, with the latest version being the Building Regulations 2010.
  • The Competent Person Scheme was introduced in 2002. This allows enterprises to self-certify that their work complies with building regulations, without the need to get those works inspected and approved by a building inspector and the local authority. There are approximately 17 schemes in place. Each scheme has its own application process, rules and competency requirements.
  • The Construction Design and Management Regulations (CDM) require contractors to ensure any labour personnel have sufficient knowledge, skillset and experience to carry out works which meet health and safety requirements on site.

The obvious gap which comes to mind is that various schemes are voluntary and do not provide enough protection for vulnerable property owners, such as the elderly. For large scale projects, there is a need for main contractors to be able to select high quality subcontractors with confidence that they meet minimum safety requirements on building sites.

What are the new proposals?

The basic idea is to ensure a higher level of confidence and competence across the construction industry. This will be demonstrated by introducing a framework ‘to facilitate upskilling and promote understanding of, and adaptation to, technological and regulatory change’. A licensing scheme would serve as a mechanism to increase professional standards and productivity across the industry.

What will a licensing scheme achieve?

The removal of builders who fall below the minimum standards will increase consumer confidence in the domestic market. The FMB suggests the scheme would provide an equal level playing field, upon which different enterprises would differentiate themselves and ultimately lead to increased competition in the industry.

Professionalism will increase by ensuring firms meet basic standards such as:

  • technical competence
  • professional development, and
  • management skills

This would eventually lead to a culture where quality for work is the norm.

Builders would also be required to keep up to date with health and safety regulations and manage health and safety on project sites.

Who will sit on the task force?

The task force will be chaired by Liz Peace, a former CEO of the British Property Federation, and the following organisations will sit on it:

  • Association of Consultancy and Engineering
  • British Property Federation
  • Chartered Institute of Building
  • Construction Products Association
  • Electrical Contractors Association
  • Federation of Master Builders
  • Glass and Glazing Federation / FENSA
  • Local Authority Building Control
  • Royal Institution of Chartered Surveyors
  • TrustMark
  • Which? Trusted Traders

What next?

The FMB report suggested that the licensing scheme would require new legislation with the task force to lobby the government and introduce a Construction Industry Licence Bill. It still remains to be seen whether the task force will succeed and, if it does, when the scheme will come into force.

If you have any questions about the proposed licensing scheme, or would require advice on various issues relating to your business, please do not hesitate to contact our specialist construction solicitors.

I am a construction lawyer and can be contacted on 01245 453 804 or, alternatively, you can email me at perdeep.grewal@birkettlong.co.uk.