Ombudsman Complaint- Minister and Fee Fixing: SI.9

by Bregs Blog admin team

 

making_a_complaint

In an previous post a registered architect sent a complaint about the Department of the Environment, Community and Local Government (DECLG) and Minister Hogan’s statements regarding fees for professional services associated with new roles under SI.9.

Here is a another complaint by a registered professional on the same issue sent to the Ombudsman. Many engineers, architects and surveyors are frustrated by the DECLG and the Minister’s repeated cost range for SI.9 of between €1,000 and €3,000 per dwelling. Quote from the previous post (see here):

“…we wonder have any of the representative bodies concerned, engineers, surveyors or architects (ACEI, SCSI, RIAI respectively) made similar representations, on behalf of their members, to the Minister or Department? If not it looks like their members are facing an uphill battle with clients, trying to agree a sustainable fee for the new certifier roles, with Ministerial public statements on costs uncorrected.

We note subsequent to this complaint being lodged in an Engineers Journal article by Orla Fitzgerald (BCMS spokesperson for the representative body for architects (RIAI)) the additional time needed for new SI.9 roles for a €500k building was noted to be 18 days. Again quite at odds with the DECLG quoted indicative costs. See post here.

The Ombudsman complaint is as follows. We are not aware of any escalation to Europe on this matter at time of writing. Personal details of author have been removed at the author’s request.

__________

Please find below my complaint against fee fixing and distortion of the market with respect to professional services associated with Building Control (Amendment) Regulation (SI.9 of 2014) 

Dear Ombudsman,

Please find below my complaint against fee fixing and distortion of the market with respect to professional services associated with Building Control (Amendment) Regulation (SI.9 of 2014)

Here are my contact details:

Name and Address of Parties Complained About:

Minister Phil Hogan, Leinster House, Dublin 2. Email: minister@environ.ie; Tel (0)1 888 2403; and Department of the Environment, Community and Local Government Tl 1890 20 20 21 or+353 (0)1 888 2000; email: press-office@environ.ie

Details of complaint:

Minister Hogan in numerous occasions recently has quoted fees for the new Design and Assigned Certifier roles under Building Control (Amendment) Regulation (SI.9 of 2014) at between €1000 to €3000 maximum per house. This fee range was noted in a regulatory impact assessment undertaken for SI.9 (previously SI.80) in 2012. This fee range is below-cost and inhibits free market forces, distorting the market in the process. The Minister for the Environment has spoken on the airwaves, on the major morning news programme on the principal broadcaster,  about the fee which a house owner could expect to  pay for an architect to act as Design Certifier and Assigned Certifier under the new regulations. Many of my clients, whether actual or potential, listen to this programme. The matter is of such personal importance to those people, that they will remember the advice of the Minister.

The Minister has said that my clients can expect to pay “between €1000 and €3000” for these services. This has now made it impossible for me to say to my client that the fee should be a multiple of these figures, as my clients question my professional honesty. These services are necessary on all new dwellings and on all extensions to dwellings exceeding 40 square metres (about 430 square feet) starting after last Saturday [March 1st 2014]. This is a major portion of my business and of my family’s livelihood.

This inappropriate intervention by the Minister gives me a choice to:-

  1. Withdraw from the market, with the consequent loss of my livelihood;
  2. Quote a fee which is a multiple of what the Minister has said, causing my clients to doubt my integrity;
  3. Undertake the work at a fee equal to, say, the highest figure which the Minister has said, but which is then only 20% of what I need to charge to break even for an annual personal income of €60,000.

Details of Goods or Services:

Professional costs associated with the provision of the duties of Design and Assigned Certifier under Building Control (Amendment) Regulation (SI.9 of 2014).

Evidence to Support Claim:

Regulatory Impact Assessment completed by DECLG in 2012 (pdf copy attached). Numerous written answers by Minister during January and February 2014 along with 28 February 2014, Morning Ireland RTE News, Minister Phil Hogan:

“No it will not be expensive! All this exaggeration about thirty, forty, fifty thousand and that direct labour was going to be out the window or banned as a result of this is absolute nonsense. It’ll cost about one to two thousand euro depending on what figure they negotiate with professionals.

Copy of transcript of interview attached. In addition Dail debate from 27th February 2014: Minister Phil Hogan to Barry Cowen TD (link attached)- quote:

I assure Deputy Cowen that all of the nonsense on RTE this week is absolute misinformation to the extent that it is being claimed that the cost of building a house by direct labour in a rural area will increase by as much as €50,000. Additional compliance should cost between €1,000 and €3,000, depending on market forces and where the best deal can be secured. I encourage small business professionals, such as draughtsmen, to register with the professional bodies in order that they can act as assigned certifiers.”

Reasons given to you but the firm being complained by you:

The roles of design and assigned certifiers can only be undertaken by three registered professional bodies. The architects representative body the RIAI issued CPD advice recently at a CPD event on monday 24th February 2014 in the Aviva stadium to over 500 members on the issue of hours required to undertake these new roles under the regulation. The presentation suggested 160 hours was required for a typical house for these roles. Copy of Shane Santry presentation attached. This would indicate €6.25 per hour as an hourly rate including vat at 23% for a competent engineer/ surveyor or architect to undertake these duties. This is a significantly below cost figure. This also distorts the market for any other EU registered professional wishing to compete for services in Ireland.

How does this affect your business?:

I was asked to do a fee proposal for a typical house. To provide a fee for services associated with SI.9 I indicated a reasonable fee for a suitably qualified engineer earning a salary of €60k per annum would be in the region of €90- €100 per hour, including salary, professional insurance, overheads, office and other costs. Based on RIAI (representative body for architects) guidance the cost for the roles of SI.9 would be €15,000.

The minister’s statements and departments specific figures has now made it impossible for me to say to my client that the fee should be a multiple of these figures, as my clients question my professional honesty. This is a multiple of the indicative costs issued by the Minister and the Department and could only be achieved at below-cost tendering. As such the Ministerial and Department guidance is distorting the marked and is precluding me from earning an income. These statements need to be retracted by both Minister and the Department immediately and public correction issued.

What is your relationship to the firm(s) being complained about?:

The Minister and Department responsible for current legislation affecting the construction industry an my profession.

Status of complaint:

I am a registered professional under the Building Control 2007 Act, an Architect, and a consumer. I am a registered member of the Royal Institute of the Architects of Ireland and the Royal Institute of British Architects.

Details of anyone who may be able to provide further information regarding the complaint:

• Shane Santry, RIAI, 8 Merrion Square, Dublin 2, Tel: 01-6761703; He was the RIAI CPD Speaker on additional hours required. The RIAI are the first of three registered professional bodies.

• Robin Mandal, RIAI, 8 Merrion Square, Dublin 2, Tel: 01-6761703; He is current RIAI president.

• Toal O’Muire, RIAI, 8 Merrion Square, Dublin 2, Tel: 01-6761703; He is RIAI past- president.

• Anne Potter, Chief Executive, ACEI, 46 Merrion Square, Dublin 2.Rel.: (01) 6425588; Email:info@acei.ie These are the second registered professional organisation.

• Kevin Hollingsworth, The Society of Chartered Surveyors Ireland, 38 Merrion Square, Dublin 2:Tel: (01) 6445500; Email: info@scsi.ie. He is spokesperson on BC(A)R SI.9 for surveyors, the third registered professional body.

Information attached:

Copy of Shane Santry CPD presentation form Aviva RIAI CPD on Monday 24th February 2014

9. Shane Santry -Estimate of Hours required – BCAR CPD

Copy of transcript of  February 2014

Morning Ireland_28Feb2014(PhilHogan)

Copy of Regulatory Impact Assessment 2012

ria 2012 (si80)

Building Regulations Application: 27 Feb 2014: Dáil debates (KildareStreet.com)- click link here.

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