Financial implications of the Act
- Financial implications of the Act include, but are not limited to:
- The establishment and running of the national Building Safety Regulator within the Health and Safety Executive. The Government is already making available funding for Health and Safety Executive to deliver certain "shadow" Building Safety Regulator functions within the Secretary of State’s existing powers, with up to £16.4m made available in 2020/21 and increased funding in 2021/22. The Impact Assessment includes estimates for the future costs of the Building Safety Regulator;
- Dame Judith Hackitt’s Independent Review recommended that the regulator for buildings in scope of the more stringent regulatory model should operate a full cost-recovery model. The Government intends to implement the recommendation of the Independent Review around cost-recovery to the extent permitted under Managing Public Money principles. The Act therefore makes provision for Building Safety Regulator to be able to charge substantial fees. Details of preliminary work undertaken to estimate achievable cost-recovery rates across each Building Safety Regulator function are set out in the Impact Assessment;
- The costs of delivery of the more stringent regulatory regime include costs for fire and rescue authorities and local authorities, given the powers in the Act for these authorities to support the work of the regulator on higher-risk buildings through a "multi-disciplinary team" approach. The Act makes provision for these local authority and fire and rescue authority costs to be met through reimbursement by the Building Safety Regulator (with Building Safety Regulator fees expected to cover the costs of the team delivering regulator’s functions), or grants by the Secretary of State. Grants may also be appropriate to build capability;
- The establishment and running of the National Regulator for Construction Products, covering the whole of the UK, within the Office of Products Safety and Standards (OPSS). The Government is already making available funding for OPSS to set up its construction products functions, including operating within the Secretary of State’s existing powers, and has allocated up to £10.3m in 2021/22. The Impact Assessment includes estimates for the future costs of the National Regulator for Construction Products;
- The Act also enables the Secretary of State to make provision to apply charges on manufacturers, importers and distributors in relation to regulatory and enforcement activity undertaken by the relevant authority for the regulation of construction products, where applicable. This will enable local Trading Standards and the national regulator to recover some of the costs of their associated regulatory activity, in line with regulatory good practice and to the extent permitted under Managing Public Money principles. Details of this are subject to further work between OPSS and DLUHC;
- There may be costs associated with the establishment and maintenance of the New Homes Ombudsman Scheme and enforcement framework. The Secretary of State must make arrangements for a scheme. Those arrangements may include the selection of a third party to establish the scheme and maintain it, establishing and maintaining the scheme directly or establishing the scheme and appointing another person to maintain the scheme. The New Homes Ombudsman will be funded by fees payable by its members. The Impact Assessment includes estimates for the future costs of the New Homes Ombudsman; and
- There may also be costs associated with the additional activities for Local Housing Authorities as dutyholders for their housing stock, insofar as it falls within scope of the Act, and for the additional activities within the justice system, to support enforcement.
