The CIOB Policy Team Newsletter - March 2021

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One thing you need to do... updated with the Building Safety Bill

With the Fire Safety Bill entering its final stages and soon to be given Royal Assent, it paves the way for progress of the Building Safety Bill.

The Building Safety Bill is designed to take forward fundamental reform of the building safety system and address issues laid out in the Building a Safer Future review by Dame Judith Hackitt DBE. The CIOB has been monitoring progress of the Bill and communicating its progress through a dedicated newsletter.

If you, or a colleague would be interested in registering for the newsletter you can sign-up here.

1. Fire Safety Bill debated in the House of Commons & The Government’s response to the Fire Safety Order

The Fire Safety Bill 2019-20 is currently in its final parliamentary stages and is undergoing final amendments before the Bill receives Royal Assent and passes into law.

Four Lords amendments were considered during a House of Commons debate on 22 March, concerning the prohibition on passing remediation costs on to leaseholders and tenants.

Kicking off the debate on the amendments for the Government, Minister for Housing, Christopher Pincher MP, begged to move that the Commons disagrees with the Lords in their amendment 4B, 4C, 4D and 4E (details of the amendments here).

Pincher stated that all residents should feel safe in their homes, adding this was why the Government was making an additional £3.5bn available for the removal and replacement of unsafe cladding on residential buildings – targeted at the highest-risk buildings over 18m tall. He noted progress had also been made by the Royal Institution of Chartered Surveyors on revising guidance on EWS1 forms.

Pincher said that despite the best intentions of the Lords amendments, they were unworkable and impractical and did not reflect the complexity involved in apportioning liability for remedial defects.

Shadow Minister for Policing and the Fire Service, Sarah Jones MP, said that leaseholders should not have to fund the cost of fire safety remediation works when they are not to blame and members across this House are united on this issue. These comments were echoed by other MPs including the Chair of the Regulatory Reform Committee, Stephen McPartland MP, and the Chair of the Housing, Communities and Local Government Committee, Clive Betts MP who stated it was the Minister for Housing who is responsible for transferring liability to leaseholders in this Bill.

Deputy Leader of the Liberal Democrats and Spokesperson for Education, Daisy Cooper MP, said that the amendment proposed, despite not being perfect, was the only proposal on the table to protect leaseholders and called on members to support it.

Kevin Hollinrake MP, said that it could not be right that leaseholders should face bills for remediation, but the amendment would cause difficulties in that it would put the onus back on a building’s freeholder. He furthered that freeholders would simply close the company and hand back the responsibility, which would once again fall back to the leaseholder.

Pincher told the House that it was important to implement a clear framework and transparent legislation to support fire and building safety reform and the amendment proposed was impractical and did not take into account remedial works that arise outside of the fire risk assessment process.

The House disagreed with Lords Amendments 4B, 4C, 4D and 4E. The Bill shall now return to the Lords for consideration.

Read the full debate here.

Details of the Fire Safety Bill can be accessed here

Fire Safety Order (FSO)

The Government has published its response to the Fire Safety Order (FSO) consultation as part of the process to ensure that the Regulatory Reform continues to be fit for purpose in reform of the wider building safety landscape.

The document provides a summary of the responses received and sets out the next steps that Government will take to strengthen fire safety for all regulated buildings, including:

• Legislating through the Building Safety Bill to strengthen the Fire Safety Order in key area
• Implementing changes to improve engagement between building control bodies, and fire and rescue services.
• Delivering new regulations through Article 24 of the Fire Safety Order in response to the Grenfell Tower Inquiry Phase 1 Report recommendations

Measures to improve the quality of fire risk assessments and competence of those who undertake them among those responsible for fire safety will be included in the Building Safety Bill when it starts its passage through parliament. The Government’s response also examined the provision for unlimited fines to business owners for offences in relation to the impersonation of an inspector, failure to comply with specific requirements imposed by an inspector, and failure to comply with requirements relating to the installation of luminous tube signs.

The Government also intends to launch a consultation on personal emergency evacuation plans in the Spring to seek additional views on implementing the relevant Grenfell Tower Inquiry recommendations.

Read the Government’s response to the Home Office’s Fire Safety Consultation here

2. Environmental Audit Committee Select Committee report on energy efficiency of existing

On 3 August 2020, the CIOB responded to the Environmental Audit Committee’s (EAC) inquiry into the energy efficiency of existing homes, click here to read. In the response we provided evidence on the effectiveness of measuring energy efficiency through EPC ratings, how the Government can frame a covid-19 stimulus strategy around improved energy efficiency of homes and what policies would need to be implemented.

In March, the Committee published the findings of its inquiry, concluding that “improving the energy efficiency of all homes provides a huge opportunity to develop supply chains and provide jobs across the UK for all levels and skills, helping to deliver the Government’s levelling-up agenda and a sustainable post-covid recovery”.

We were pleased to see that our evidence was reflected in their final report. Notably, the Committee found:

There is a chronic shortage of skills in the domestic retrofit sector. This has been exacerbated by stop-start policy, which has eroded industry and client confidence and prevented much needed investment in green construction skills

Failure to improve the energy efficiency our existing housing stock is putting our net zero target at risk. The EAC finds that in England alone, over 10 million owner-occupied homes will need to be upgraded to reach EPC Band C or above by 2035 if the Government is to achieve its climate goals. Despite this, the Chancellor missed an opportunity to address this challenge in his latest Budget statement, where no mention was made of energy efficiency.

The industry needs certainty on the future direction of travel.The Heat and Buildings Strategy must be published urgently, and the Green Homes Grant scheme must be overhauled, to repair the trust of the homeowners and tradespeople in green initiatives and to give industry the time and confidence to upskill.

The Government must develop a range of financial incentives to address the cost barriers of retrofit and help homeowners and landlords to improve the efficiency of their properties. This will mean considering existing proposals such as VAT reduction and stamp duty rebates, as well as working with the private sector to develop more innovative funding mechanisms. In Germany, for example, the Government has introduced highly successful state-funded low interest loans to support homeowners on a large scale.

If you would like further information, the team has written a blog about the publication and the next steps the CIOB believes Government should take.

3. Policy proposal: Deferring stamp duty for retrofit.

The CIOB’s new Associate Director for Policy, Hew Edgar has written a short blog piece seeking to garner views on deferring stamp duty for retrofit works.

As we have mentioned in previous newsletters, the CIOB believes that retrofitting the existing housing stock proves a significant opportunity to reach the Government’s ambitious net zero target, whilst utilising the construction industry as a key tool in its economic recovery post-covid.

The blog seeks to explore whether the stamp duty holiday, which has been effective in kick starting the house buying and selling market, can be used as a mechanism for enhancing properties to bring them in line with EPC standards, as well as improving the quality and fabric of homes.

We plan to run more of these blog pieces to generate new ideas and garner feedback from CIOB members and industry professionals.

4. Devolved News – Scotland and Wales 2016 – 2021: Unfinished business and what’s to come?

With the Scottish and Welsh Elections due to take place on 6 May, we take a quick look at what’s been achieved over the last five years and what policies might be carried over by the next Government’s.

Scotland

Scotland is going to the polls in May 2021 following a turbulent political and economic parliamentary session of 2016 – 2021. This parliamentary session saw a focus on the built environment that the four preceding sessions had not seen, and over the course of the five year term, the UK voted to leave the EU, a climate emergency was declared, and a global pandemic led to a series of lockdowns.

The construction sector, however, showed its resilience by effectively navigating the turbulence and maintaining a sound level of output and productivity; not least the completion of the £1.3bn Queensferry Crossing.

Construction resilience and successes aside, the post-pandemic recovery will naturally feature in the six-week election campaign and beyond. The new parliament, however, must not lose focus on some unfinished business leftover from the last term:

Affordable Housing

The Scottish Government’s flagship housing policy over the last parliamentary term was the £3bn investment in 50,00 affordable homes; 35,000 of which would be for social rent.

With the Covid-19 lockdown restricting activity in the construction sector, the social homes target stalled, but the Scottish Government has committed to completing the remaining homes over the next year.

On top of this, the Scottish Government’s long-term strategy, Housing to 2040, outlines Scotland’s intent to “deliver 100,000 social and affordable homes by 2031/32”. Even with the key word here being “deliver” (which does not necessarily mean new build) this is no mean feat and could mean a constant flow of projects for construction companies.

Tenement Maintenance

In March 2018, the cross-party, stakeholder-led Scottish Parliamentary Working Group on Tenement Maintenance was initiated with the purpose of establishing solutions to aid, assist and compel owners of tenement properties to maintain their buildings. The final report, published in May 2019, made recommendations for mandatory Owners Associations, Building Reserve Funds and Building Surveys, and was responded to positively by the Scottish Government. Covid-19 impacted progress, but sector participants, as well as tenement owners and occupiers, will been keen to see this restarted as soon as possible.>

Procurement and Payment

Voiced sectoral concerns over public procurement and payment were not new in 2016, nor were they solved over the last parliamentary term. With the UK leaving the EU, there is opportunity to reassess the procurement and payment regime and make necessary amends that can best support the whole of Scotland’s construction industry.

Any review and amends should be instigated as soon as possible to kickstart programmes and projects from Scotland’s Infrastructure Investment Plan (IIP) and maintain momentum.

Wales

The current Welsh Government is a Labour-led administration, with Mark Drakeford MS holding the position of First Minister of Wales since December 2018, taking over from Carwyn Jones.

Welsh Labour’s manifesto ahead of the 2016 Senedd election called a plan for prosperity included pledges to include childcare support for working parents, more money for schools, 100,000 age-all apprenticeships, tax cuts for small businesses, a new treatment fund for the NHS, and a ‘better deal’ for people who need care in old age. At the time, there was also criticism about the lack of detail on Welsh Labour’s biggest infrastructure project – the £1bn M4 relief road.

Five years on, Wales is in a very different position, with the impact of Brexit and the covid-19 pandemic alternating plans and commitments from the Government. These issues are likely to set the basis for future policy making. Indeed, Wales’ Well-being of Future Generations Act 2015 help sets the framework for these issues, ensuring public bodies – and by extension anyone that performs functions in the public interest – consider the long-term impact of their decisions, work better with people, communities and each other, and tackle persistent problems such as poverty, health inequalities and climate change.

According to polling organisations, the May 2021 Senedd elections is likely to be one of the most highly contested, with potential coalitions and agreements needing to be struck to form a Government. We anticipate all the main parties will focus on post-economic recovery from the covid-19 pandemic, with varying approaches to stimulating the Welsh economy.

Questions around Wales’ constitutional future may also be raised by the likes of Plaid Cymru. There are areas of increasing support for Wales leaving the UK, although polling has suggested it is nowhere near the levels of support for independence in Scotland.

Engagement

The CIOB will be producing a manifesto for Wales ahead of the election on 6 May. The CIOB has also participated in the creation of a manifesto for Scotland in alignment with the Construction Industry Coronavirus Forum (CICV) which can be accessed here.

Over the coming weeks, we will promoting the manifestos amongst policy makers as well as analysing each of the commitments from the main political parties in their respective manifestos.

If you would like any further information on either the Scottish or Welsh elections, then please contact [email protected]

5. Devolved News – Procurement in Northern Ireland

The Minister for Finance announced a reconstituted NI procurement board back in December 2020, bringing together Government and industry expertise (membership can be viewed here ). Half the board is made up with representatives from the construction, manufacturing, SME and social enterprise sectors. The other half consists of senior civil servants whose expertise is directly tied to the design and management of procurement exercises.

In a new governance shake-up, policy approved by the Procurement Board will now go to the Executive for approval. More control over procurement will now rest with the Department of Finance.

The Finance Minister has also announced a new policy to make ‘social value’ a mandatory component of procurement exercises. It could see suppliers required to provide low carbon or living wage guarantees.

This chimes with the CIOB response to the Treasury Select Committee inquiry into the updated Green Book, in which we urged shift away from a profit driven attitude towards procurement within Government methodology and guidance. Additionally, we have been working with the Construction Innovation Hub to develop a Value Toolkit which drives value-based decisions. The CIOB recommends that procurement should champion an outcomes-based approach to the appraisal of social value and undertake and encourage amongst departmental stakeholders rigorous monitoring and evaluation to determine the effectiveness of CBA and CEA appraisal frameworks.

While procurement will remain a devolved function, Westminster have indicated that it will engage with the devolved nation on issues raised in the Green Book review. The CIOB looks forward to building on its relationship with CPD and engaging with the newly constituted NI Procurement Board as it embarks on its program of work.

Coming up in April

The Government’s response to the Housing, Communities and Local Government (HCLG) Committee’s pre-legislative scrutiny of the Building Safety Bill is still expected, having not been released in March.

There are several events that might be of interest to CIOB members, this includes the CIOB sponsored Educating for a Circular Built Environment being run by the Construction IT Alliance (CITA) on 8 April, the CIOB’s annual Conservation Conference on 21 April, and a webinar to launch the CIOB’s joint research into job quality in Irish construction with the Think Tank for Action on Social Change (TASC) also on 21 April. Links are embedded in the text should you wish for further information or to register.

Lastly the Construction Innovation Hub (CIH) will launch its Value Toolkit on 26 April. The CIOB have been heavily involved in its development, alongside other organisations within the construction industry. The toolkit has been designed to help drive better social, environmental and economic outcomes through value-based decision making throughout the lifecycle of assets.

If you made it this far... here are the latest construction output figures

March saw the Office for National Statistics (ONS release its latest output figures for construction reflecting the January 2021 period. The figures showed that construction had grown by 0.9% mainly due to private commercial and infrastructure work.

This growth in new work offset the monthly fall in repair and maintenance activity which retracted by 0.4%, its third consecutive monthly fall. Currently, repair and maintenance remains above pre-coronavirus levels but in order to recover from the pandemic and see positive growth in the industry, activity in this area must improve.

While infrastructure and private commercial work have contributed to new work for the sector, it is worrying to see a continued decline in repair and maintenance activity; given that this type of work constitutes a key part of the Government’s plans to ‘build back better’ and will be essential to decarbonising our built environment. Construction has seen some growth in January 2021, but Government must ensure that plans are being put in place to promote growth in sectors, such as repair and maintenance, in order to aid in a quick recovery.

Thank you for reading this month’s update from the CIOB policy team. We will be back in your inbox next month with more information about what the team is up to, what is going on in Parliament and built environment news to look out for.

All the best,

The CIOB policy team