Inadequate Regulatory Impact Assessment for S.I.80

by bregs blog admin team

Audit-Checklist

To find out how one might effectively assess building control amendments we do not have to look far: the “Communities and Local Government: Proposed changes to the building control system – Consultation stage impact assessment” report was produced in the UK in 2012. You can read it here. The report comprehensively examines several options to revise and change the UK building control system. Their existing system, unlike ours, already has comprehensive local authority independent inspections with 80% backed by warranty.

The UK report included the Irish system as a option: light-touch, low-cost (to local authorities), self-certification, but discounted this early on due to cost to the consumer and to the wider industry. Making the system of building control simpler, leaner and more cost effective for society in general is clearly a motivating factor.

The UK is our closest model in terms of building standards, legislative system and environment. We are a fraction of the size of the UK, however our demographics are similar. One must wonder after reading this document, how the Department of the Environment, Communities & Local Government (DECLG) opted to continue with the most expensive form of building control for the industry, when a simple system of self-funded local authority independent inspections would improve building standards and save the industry tens of millions per year, while delivering a better standard of building generally and giving the consumer redress in the event of latent (hidden) defects?

Despite over 500 stakeholder submissions on S.I.80 received by the DECLG, no such study was carried out here. It appears that at no point in the consultation process or formation of S.I.80 have the impacts on SMEs, the industry and the consumer been considered in detail. The National Consumer Agency (NCA) estimates the extra cost to the Irish house building industry alone would be in the region of €30m- €90m per year (based on a sustainable level of 30,000 new dwelling units per year). The financial impact of S.I.80 on the wider industry is likely to be a multiple of this. With no comprehensive independent system of local authority building inspections, the effect of S.I.80 on building standards will not give the return for this extra cost to the industry, nor to the consumer. In their 2012 submission the Competition Authority express concern about “whether the additional costs imposed by the proposed regulations are in proportion to any benefit they might bring”

Worryingly, it would appear that the Department did not carry out a Regulatory Impact Assessment (RIA) of the March 2013 wording of S.I.80. A very brief RIA was completed in 2012 and the lack of a follow-up would suggest some of the very significant changes introduced by the Minister in the March 2013 draft have not been comprehensively examined. The RIA produced by the department is included as part of the following document “Strengthening the Building Control System – A Document to inform public consultation on Draft Building Control (Amendment) Regulations 2012“ . See document here

The Impact section (section 4) of the RIA is only six pages long and does not appear to be backed up with any research. For example, under the Section 4.6(i) Impact on National Competitiveness, the report makes the simple claim “There will be no negative impact on Ireland’s competitiveness”. The only costs noted is a notional cost per dwelling. Remarkably, the more significant insurance costs are excluded. This is an extraordinarily light assessment of a very significant amendment.

We do not need to look to the UK for examples of good impact assessment. The RIA of our own Construction Contracts Act 2013 (available here) and recent Health & Safety Legislation (available here) provide far more comprehensive analysis. Why has S.I.80 only had the most cursory impact assessment done on the 2012 draft and nothing since? Already three Senior Counsel legal opinions completed on the March 2013 draft of S.I.80 identified serious legal and practical issues associated with implementation, and all concurred that S.I.80 is unworkable in its current form. Given the wide-ranging effects on the construction industry, SMEs and the wider economy, it is remarkable that essential stress-testing has not been completed by the department.

Advertisements