The Federation of Master Builders (FMB), with support from NHIC, is campaigning for the Government and industry to back the introduction of a licensing scheme for the UK construction sector.
In an unusual display of support for additional ‘red tape’, almost 80% of small and medium-sized (SME) construction firms want to see a licensing scheme introduced to limit the ability of cowboy builders to operate in our industry.
By increasing consumer protection and removing the scourge of cowboy builders, a licensing scheme would permanently drive up quality and ultimately improve the image of the whole industry. The FMB believes strongly that this is the right time to push for greater regulation, as the Independent Review into Building Regulation and Fire Safety calls for a comprehensive approach to compliance, and as there are frequent reports in the media of concerns over the quality of some new build homes.
The FMB published an independent research report in July 2018 entitled ‘Licence to build’, which was produced in collaboration with Pye Tait. The report not only makes the case for licensing, for the first time, a suggested model for how licensing could work has been put forward. Drawing on the views of more than 20 industry experts, the report provides the basis for an honest and constructive conversation that the Government and industry about how a licensing scheme could be realised.
The model put forward by the report recommends that the licence is administered by expanding on the existing remit of the new ‘quality mark’, a badge of competency developed following the recommendation in the Each Home Counts review. To this end, the licence and its overarching criteria would be administered by a central body, with a plurality of scheme providers actually taking on applications and providing the gateway to the licence. The scheme would, therefore, build on existing industry structures and continue to encourage competition and diversity among scheme providers.
The licence itself would not be a prohibition in terms of cost nor bureaucracy. The fee would be set according to turnover, with the largest firms in our sector paying something in the region of £1,000 every three years. The smallest firms would pay around £150 every three years. These fees would be used to fund the administration of the scheme but also its policing – a crucial element of its success. When firms renew their licence, there would be an opportunity to encourage CPD and upskilling – another useful means through which to raise quality and standards. Any firms that failed the audit or the application would cease to trade. An online database managed by the central body would keep an up-to-date list of all compliant firms so that clients, lenders and insurance companies are able to easily check their status.
That anyone can set up a company and call themselves a builder is not right. Consumers have little confidence in construction, as builders working in the domestic sector tend to act as the ‘shop window’ for the industry as a whole. Cowboy builders embroiled in a ‘race to the bottom’ cut corners and request cash-in-hand for their services, leaving consumers with poor outcomes and little protection. Clearly, cash-in-hand work also leaves the Treasury with less revenue. A licensing scheme would bring competition according to quality to the
So far, more than 30 organisations, including trade associations and consumer groups, have registered their support but we need more champions. To register your organisation’s support for the campaign, or to arrange a further informal discussion about the proposal, please email firstname.lastname@example.org. Show your support on Twitter by using the hashtag #licencetobuild
Summary of key scheme features
- The scheme should be governed and administered by a single authority, but integrated within existing structures.
- The remit of the licence should be UK-wide.
- The licence should apply to all types and sizes of construction work conducted on a paid-for basis.
- The licence should apply to all legal entities of a construction firm (including sole traders) but not individuals.
- Once issued, a licence should remain valid for a period of three to five years.
- Fee-setting should be tiered and proportionate to the size and risk level of a business.
- All firms involved in construction work should meet certain pre-requisites in order for the licence to be granted and renewed.
- Robust enforcement and tiered sanctions should be put in place to act as a strong deterrent against trading unlicensed.
- A publicly-accessible online database of licensed traders should be established.
Federation of Master Builders