Building Safety Levy: advice from the Regulatory Review Group

To: Jenny Gilruth, Deputy First Minister and Cabinet Secretary for Finance and Local Government

From: Professor Russel Griggs OBE, Chair, Regulatory Review Group

Sent: 25 September 2026

I am writing as Chair of the Regulatory Review Group (RRG) to provide independent  advice on proposed measures in the Scottish Building Safety Levy.

This note provides an overview of the RRG’s role and details recommendations on the engagement with landlords and tenants, the use of existing standards and communications considerations. 

Regulatory Review Group (RRG) 

The independent RRG was re-established by the Scottish Government as part of the New Deal for Business to support Scottish Ministers in improving the regulatory environment for businesses and their involvement in that process. The RRG’s membership is detailed in the Annex. The RRG consider upcoming regulatory developments and as part of its work programme identified the proposed measures in the Scottish Building Safety Levy.

The RRG’s objectives are to: 

• work constructively with the Scottish Government to ensure that policy officials and relevant Ministers are sighted on implementation challenges with regulations early in development. 
• deliver purposeful and targeted written and verbal advice to the Scottish Government, drawing upon extensive expert insight from business and regulators across Scotland. 
• support the delivery of the New Deal for Business by ensuring that the potential barriers to the success of Scottish Government policies are removed through an improved understanding of the practicalities of implementation. 

The RRG’s remit is to examine and identify implementation challenges and appropriate mitigations of regulation. The RRG does not provide a view on the appropriateness of substantive policy or decisions to be taken on legislative priorities.

Scottish Building Safety Levy

Along with RRG members, I met with your officials on 26 August 2026. Your officials provided an insightful update on the progress made with regard to the proposed regulations and provided detailed responses to our questions. We welcome this proactive early engagement with your officials as they make progress. The proposed regulations will see the implementation of the Scottish Building Safety Levy, from 1 April 2028.

The following recommendations have been made by the RRG for consideration as part of the policy development and legislative process: 

• the costs of the tax could ultimately be borne, at least in part, by the consumer. Your officials advised RRG members that builders were unlikely to absorb the full costs of the tax, and that the impact may ultimately be on the price of the land upon which properties are built, with there likely to be a ceiling as to how much consumers are willing to spend on new-build properties. Whilst RRG members welcome that officials have engaged with  stakeholders on this issue and considered the risks to the housing market and consumers, there remains risk in uncertainty as to whether there will be an impact to consumers, and thus to housing supply, should the cost be passed on by housebuilders. Members are also concerned that there is a risk of inconsistency in approach if some housebuilders absorb the cost and some pass the cost onto consumers. 
• the Building Safety Levy may not be sufficient to cover the cost of remediation. Officials advised that the levy is only expected to cover about 25% of the total cost of remediation. Members were uncertain and concerned as to how the bulk of the cost of remediation will be met and we advised that more clarity on funding to address any shortfall should be investigated and confirmed.
• there will be a need for a comprehensive monitoring programme to identify issues and unintended consequences and also to ensure that remediation is carried out as planned. RRG members welcomed the commitment from officials that there would be a three year period of review built into the policy which will allow for rates and exemptions to be revisited alongside a report to Parliament. Given the potential for impact on house-builders and consumers, clarity on the impact of the cost of remediation and the potential for unintended consequences will be essential.  

RRG members welcome the pro-active approach of your policy officials to engage with RRG members, and also the considerable thought which has been given to good engagement with stakeholders. Good progress is being made, and we invite your policy officials to return to the RRG once this work has progressed further. We also welcome that officials have already agreed to do so.

A copy of this letter will be published on the RRG’s webpage.

The RRG would be happy to discuss the above recommendations with you and would welcome an update on how the Scottish Government intends to take this forward during the legislative process.