Building Control News

Opinion: Hackitt Review and the mutuals policy

March 5, 2019

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Paul Wilkins from the ACAI looks at how the Hackitt review risks reducing building control competition and how it could cause the government’s regulatory standards of Approved Inspectors to slip under the Public Service Mutuals policy

The Hackitt Review is broadly a step in the right direction for the UK’s building and construction industry. However, it has made several missteps – such as its failure to explicitly address combustible cladding and its recommendation to restrict the role of Approved Inspectors (AIs) while expanding the role of local authority building control.

Since the privatisation of building control standards, quality and expertise within the sector have massively increased as companies have invested, where underfunded local authorities often could not, building their competence and capacity.

This has been delivered within a more robust regulatory framework with Approved Inspectors being independently audited, required to adhere to a code of conduct and being required to demonstrate and maintain relevant qualifications and experience. None of these apply to local authority building control teams.

Another area where Hackitt risks undermining progress is the Government’s innovative Public Service Mutuals policy, which seeks to improve delivery by spinning out local authority building control from local authorities. This is not an abstract concept – there is a clear case study in the form of Elmbridge Council.

HM Government contributed £37,950 to help mutualise the Elmbridge building control team and the local authority currently retains a 20% stake in the business. This is in recognition that mutual can provide better services, and better empower staff and create a sense of ownership, than the local authority system.

The mutual policy approach currently sees these building control functions compete with the private sector. The ACAI is supportive of this approach as a sensible step to promote competition, improve standards and service delivery. However, Hackitt risks reducing competition, while expanding the role of mutuals who are not held to the same regulatory standards as Approved Inspectors.

As public service delivers bodies these mutuals are not governed by the Approved Inspector regime. In effect, once the government has implemented the Hackitt Review we may see a system where private companies operate along commercial lines but without the additional regulatory oversight provided by the Approved Inspector system.

Local Authorities are under increasing financial pressure. MHCLG recently allocated an additional £1.3bn in funding for local authorities to help meet the increasing challenges they face. Inflation-adjusted spending on planning has fallen by 55% between 2010/11 and 2017/18 as councils have been stretched to breaking point.

Spinning out building control teams could be one way of addressing this issue but without the proper regulatory oversight, this could significantly undermine building safety.