First steps to understanding the impact of the Building Safety Act30 May 22
Experts from the Building Safety Regulator, the construction law and insurance sectors, and tier one contractors shared a podium at Kennedys' London office last week to discuss how introduction of the new Building Safety Act will impact the way the industry currently operates and what changes will be necessary to meet the new requirements.
The in-person forum was organised by Kennedys and GIRI for the benefit of GIRI members, as the first in what is planned to be a series of events and workshops around this major industry change. GIRI also plans to create a steering committee to provide member input into the events programme.
Kennedys senior associate Angela Roberts introduced the legal context of the new Act, focussing on key points such as the 'gateway principle' - a rigorous inspection of regulatory requirements that will ensure building safety risks are considered during planning, design and construction - and the 'golden thread' of information that must be created and updated throughout a building's lifecycle. She noted that the cost of remedying any defects in buildings would be the responsibility of developers or landlords, rather than leaseholders, but that there was scope for claiming damages from manufacturers, installers and even contractors or developers in certain cases.
She also highlighted the increase in the limitation period, which has gone up to 30 years and will potentially lead to claims for buildings dating back to the 1990s. Where SPV companies had been formed to act as scheme developer, and might since have been dissolved, the former members, including individuals and other organisations that established the SPV, would remain liable, she pointed out.
HSE Building Safety Regulator operational policy lead Annette Hall introduced her overview of the new regulator, its main functions, and how it will operate with a clear message: "It's all about the cultural change," she said, "to ensure that those who create the risks, manage the risks."
The three main functions of the regulator will be to lead the delivery of a new, more stringent regulatory regime for buildings which fall within its scope; to promote competence for all buildings, including industry and professionals working on buildings, and building control bodies; and to provide oversight for all buildings focused on using evidence to better manage risks. "Residents must be safe, and must feel safe," she said.
About 100 people at the HSE are currently working to set up the BSR to operational level. The roadmap anticipates the Register of High-Risk Residential Buildings being open in April 2023 - although Annette accepted some dates might slip as they relied on secondary legislation being passed. Owners of buildings that fall within the scope of the register will have to sign up, and it will be a criminal offence not to do so.
However she warned that although the BSR was not due to take up its building inspection role until October next year, these inspections would apply to buildings that are currently going through the planning and design phase. With this in mind, Annette said, it is crucial for developers and their teams to understand - and fulfil - the requirements set out in the Act right now.
She also highlighted the regulator's role in ensuring competence in the industry, and noted that a lot of work is being done in this regard by the industry itself, and the BSR is working with other bodies, such as BSI, to design the competence framework. In the interim, an independent competence panel was being established.
GIRI members could do a number of things to prepare, she said. The first step was to understand their company's role in the new system, and to consider whether staff have the necessary skills, knowledge, experience and behaviours to fulfill their role. She encouraged them to share experiences and good practice in building design, development and management and familiarise themselves with the draft regulations and fact sheets published on the Parliament website. More consultations will take place this year, and she suggested GIRI members should participate in them - information is issued through BSR's email alert list which can be accessed via this link.
The third presentation at the event was a contractor's high-level perspective of the Act, presented by Ian Mills (UK Head of Quality) and Martin Adie (UKCS England & Wales Head of Quality) from Balfour Beatty.
They explained that over the last few years, Balfour Beatty has been doing a lot of work to look at potential legacy issues, and putting new controls in place, but acknowledged that there is still a lot of work to do, particularly around culture. Having always been very focussed on safety, they were now turning the spotlight on quality, and in 2020 had created a quality leadership team headed up by the CEO and senior staff, to highlight its importance.
As well as setting company-wide standards for quality, which can be applied across the board, they are reviewing whether staff have the competencies they need, and considering what metrics are needed for measuring quality, and how to manage the golden thread most effectively. Governance needs to be tough, the speakers acknowledged.
The accepted wisdom is that buildings are going to cost more, and take longer to build; however Ian and Martin pointed out that changes in culture and process could make it possible for the industry-wide 'true cost of error' could be reduced from its current 21%. The refocussing away from financial and towards technical and engineering priorities, and the importance of compliance-led procurement was welcomed. A decision to only bid for jobs using two-stage tenders going forward might lead to less work, but quality would be improved and errors reduced, they agreed.
The speakers were joined by Amanda Long of Building a Safer Future, and Andrew Harrison-Sleap, executive director of Howden, for a lively panel debate, answering questions from the audience that ranged from clarification of roadmap dates to the impact the Act could have on the presence of underwriters in the construction market.
The slides from the presentation can be downloaded here.