Building standards - compliance plan manager role: cost benefit analysis

3. Stakeholder Engagement

3.1 Introduction

3.2.1 A series of consultations have been undertaken with industry stakeholders to inform the cost benefit analysis. Details of the consultees are included in Annex B. The purpose of the consultations was to:

• Understand the existing approach of contractors and clients to compliance.
• Assess the current level of independent oversight.
• Discuss the proposed role of the CPM and the costs and benefits of its implementation.

3.2 Existing Approach to Compliance with the Building Regulations

3.3.1 There was general agreement amongst consultees that confirming compliance would normally be undertaken by employees of the relevant organisations (e.g. contractors, sub-contractors). It was suggested that there is a lack of understanding about the process and requirements for handling compliance with the building regulations with some contractors expecting non-compliances to be identified by building standards surveyors.

3.3.2 Ensuring compliance with the building regulations is usually the joint responsibility of the design team and contractor, but the obligation is on the sub-contractors to monitor their own works and ensure that, at handover to the main contractor, it is compliant. If certificates of construction are being used, the sub-contractor is taking responsibility for meeting the building standards and that suitably qualified personnel have undertaken the work.

3.3.3 Many sub-contractors would have a site foreman to oversee work with a supervisor covering a few sites. The number of sites covered by one supervisor would depend on the specific project, the number of staff on site and the proximity of different sites. The main contractors site manager would usually check the main components of work at handover and prepare a snagging list if necessary. The extent of control on-site was questioned by a consultee who suggested that there was very limited checking at handover and that managers were just assuming that the work was correct.

3.3.4 Another consultee also highlighted that the current building warrant process does not recognise types of building contracts or professional appointments. The process trusts that the Relevant Person will employ good practice and ensure compliance, but the major building failures in recent years show that this trust has been misplaced. The current building warrant process is focused on the design proposal achieving compliance on paper and it was suggested that there is very limited attention to the quality of the built work.

3.3.5 On very large projects, there can be a range of people involved in design and supervision from architects to engineers to clerks of works. When budgets are tight it was suggested that more junior staff may be used and a reduced fee would usually mean less supervision. Reference was made to NHBC and other 3^rd party warranty providers who have their own inspection regimes for new housing.

3.3.6 A few consultees identified specific roles within their organisations to monitor quality and compliance:

• One organisation employs their own “independent quality inspectors” who are independent of the site teams and are involved with a number of sites. They are a “group” function and report at this level. They review all aspects of the project, undertake inspections at key stages, catalogue and photograph evidence of tests, examinations etc.
• One organisation also employs a quality control manager who has responsibility for health and safety and sporadic checks around all sites. Given the number of live sites, sporadic checks may be once a month.
• One referred to a “golden thread” approach to ensure effective management of information regarding the whole construction process from design through procurement, delivery and installation. This would include any reports of non-compliance.

3.3.7 There was broad agreement^[11] that the cost of compliance is usually built into the contract price with management and supervision often priced separately within the overall price. Main contractors will usually specify their requirements in the tender pack including prescribed supervision, trades, technical knowledge, BS/European standards to be met, qualifications of staff etc. The qualification of all sub-consultants can be checked on-site as part of health and safety documentation to prove competence, risk assessments etc.

3.3.8 It was suggested that a lot of compliance is achieved from having achieved compliance previously i.e. it is assumed from previous experience or work rather than the use of quality plans. The larger main contactors tend to have substantial quality systems in place usually meeting ISO standards. These systems can link all aspects of the project from health and safety to suppliers to inspections. However, as noted by Professor Cole^[12] the evidence of recent years has shown that these systems alone are not enough to deliver compliant buildings without interrogation to ensure the systems are achieving what they set out to do.

3.3.9 It was suggested that Design and Build contracts tend to place more responsibility onto the designer. However, the increase in the use of Design and Build contracts appears to have displaced inspections from a lot of contracts and there was anecdotal evidence suggesting that some architects have been specifically told not to go on site without the prior agreement of the contractor.

3.3.10 The compliance management role tends to be part of other roles and is not fully focussed on compliance with the approved plans and building regulations. As a result, it would not be a full-time role. It was suggested that compliance is not discussed much with professionals working to their own industry standards.

3.3 Current Level of On-Site Independent Oversight

3.4.1 One consultee highlighted that there is currently no distinction between high and low risk building projects and no mandatory requirements for independent oversight. There was general agreement that there is less independent oversight now than in the past. In the past, a clerk of works would be on-site all the time providing a verification/inspection role, but consultees suggested that not many projects now have a clerk of works role. This appears to be a reflection of the increase in Design and Build contracts which have cut out this role and tend to rely on self-certification.

3.4.2 ‘Traditional’ contracts (with an architect or contract administrator) would have independent professional oversight, but it was suggested that this type of contract is not usually used on high-risk building projects. It was felt that there has been a move away from this traditional contract to Design and Build procurement.

3.4.3 With ‘traditional’ contracts, the architect/contract administrator can mediate between client and contractor and has the power to ensure work meets the required standard of the contract e.g. payment can be withheld until any-defective work is rectified. In a Design and Build contract the employer is represented by the Employers Agent, but this role is often undertaken by a cost consultant with limited design knowledge and limited scrutiny of the “as-built” work.

3.4.4 The consultees highlighted that there are some projects where clerks of work are still involved, but the examples provided tended to relate to public sector contracts. This is likely to be a reflection of the procurement guidance for these types of contracts. In these cases, the clerk of works would maybe cover two or three projects suggesting it is not the full-time role it used to be. It was accepted that clerks of work can add value to a project, but that broader knowledge and experience would be required for the CPM role.

3.4 Compliance Plan Manager

3.5.1 Consultees were asked about the main implications of the CPM role in terms of personnel, cost and other resources.

Personnel

3.5.2 It is difficult to be precise about the staff resource required for the CPM role given that there is substantial variation in the nature and complexity of high-risk buildings. There was a general feeling that the role would equate to less than one full-time equivalent (FTE), although some very complex projects may require more than a full-time commitment (e.g. large hospitals).

3.5.3 On very complex projects, there may be a need for a multi-disciplinary team to cover the CPM responsibilities implying there is a co-ordinating aspect to the role. It was suggested that the role sounds analogous to the Principal Designer as set out in the Construction Design Management (CDM) regulations and that the fees for the Principal Designer usually equate to 0.5% to 1% of construction costs. It is understood that this role is focused on the pre-construction phase.

3.5.4 It was also suggested that the CPM needs to be an experienced construction professional with the knowledge to ask questions, interrogate and arbitrate. The CPM should also be aware of their own limits and be able to know when additional input is required.

Cost

3.5.5 In addition to salary costs for the CPM, there may be a cost attached to the higher evidential requirements of the CP e.g. tests, inspections. However, this may be covered by the work that industry is doing to improve the compliance information they provide.

3.5.6 It was suggested that any costs relating to testing are likely to be borne primarily by the product manufacturers rather than on a project-by-project basis. It was suggested that clients would not want to commission testing, but rather would expect contractors/designers to choose better evidenced solutions.

Other

3.5.7 The issue of liability of the CPM was raised as was the ability of smaller companies to negotiate the necessary level and duration of insurance cover. Insurance was considered less of a problem for large companies such that there could be a bias towards large consultancies. There appear to already be concerns around obtaining cover for fire safety matters. Hence, it was suggested that the role would have to be clearly defined to ensure professional indemnity insurance cover did not become a major issue. It was also suggested that the construction industry will need to take responsibility for quality and not “pass the buck” onto the CPM.

3.5.8 The issue of accreditation and who would be ‘suitably qualified’ for the role was also raised. The development of an accreditation scheme was suggested with some of the professional bodies perhaps willing to organise a scheme. This would ensure consistent standards for the CPM role, but a number of issues were identified including:

• The need to consider how to deal with more than one professional body wanting to establish a scheme to ensure a level playing field for the CPM role. Reference was made to the Edinburgh Group^[13] as an example.
• The cost of running such a scheme including auditing.

Current and Future Compliance

3.5.9 A range of opinions were given on the extent to which there are non-compliance issues at the point of construction completion of a project. Some consultees felt that non-compliance was low at completion while others felt that issues of non-compliance may differ from the perspective of the local authority building standards surveyor and the contractor/client. A broad assessment would be that projects at completion are rarely fine, but the list of interventions can range from a few items to full-scale reviews and the need for specialist contractors to be back on site.

3.5.10 It was generally felt that the CPM role could not be expected to negate all issues relating to the building regulations, but that it should improve compliance.

Advantages of the CPM Role

3.5.11 The role of CPM was welcomed by consultees for high-risk projects as it will bring another “set of eyes” and more knowledge to the project. The main advantages of the role were identified as:

• Buildings should perform better, have lower running costs and longer lifespans as a result of increased oversight.
• There should be a reduction in disputes at completion.
• Productivity should improve with a greater focus on getting it right first time. This should benefit contractors and drive excellence.
• The role should enable strategic discussion about the project and projects will hopefully start out on the right foot where parties can be clear and realistic about quality and cost expectations. It is a false economy to bid low as this is more likely to require remedial work down the line.
• It will introduce independent professional scrutiny of build quality.
• It should help to demonstrate greater compliance. It will provide an overarching view of the project and everything to do with compliance will be set out and collated. If something fails in the future, there will be someone to go back to and some level of legal redress.

Disadvantages

3.5.12 The main disadvantages were identified as:

• Who will take on the role and what level of insurance will be required? Depending on building complexity, it could be a challenge for one CPM. Clients will need to know the experience and expertise of the CPM and the CPM will need to know their limitations. Recent hospital projects were cited as examples of a lack of expertise. The CPM will need experience to know what the risks are, although the CP should provide a checklist for all regulations.
• There could be inflation in tender prices to cover the cost of greater oversight, but this should be balanced by lower remedial costs and lower running costs.
• There could be a delay to completion due to tougher compliance requirements.
• There could be issues relating to the availability of people to take on the role given the current shortages of people in construction.
• One consultee questioned if there is a potential overlap with local authority building standards officers and if there would be an impact on building warrant fees? The role of the verifier is (and will remain) as an independent role to undertake reasonable inquiry on a project. The role of the verifier has never been to ensure absolute compliance as this is the responsibility of the Relevant Person and the processes that they have in place to ensure compliance. The role of the CPM is to ensure that the Relevant Person has discharged their responsibility properly with oversight and management of the project.
• There could be a risk of bifurcation of the industry with firms/individuals having to make different career pathway choices as whether to go down the CPM route or not. Some individuals/firms may possess the necessary skills and others may not.
• Another layer of supervision on site was considered to be good by some consultees, but there was concern from others that it could be “another layer of unnecessary management” which would have cost implications. However, the reports of the Inquiries into the building failures of the Edinburgh Schools and DG One suggest a need for additional scrutiny and that these incidents could have been prevented with appropriate supervision and management.

Other Comments

3.5.13 A number of comments were made about the skills and experience of the CPM. Architects, surveyors and engineers were suggested as being best suited to take on the CPM role. If recruitment to CPM was in conjunction with Professional Membership Bodies this would also ensure that professionals have met particular standards as processes are in place to ensure the quality of membership. The CPM is an overarching role and having main contractor knowledge around the “buildability” of designs would be helpful.

3.5.14 It was suggested that there should be a matrix of building types, risk and the responsibilities of the CPM. Their role should also be risk assessed at the inception of the project and there needs to be clarity on their specific duties e.g. frequency of site visits. It is essential that the role is independent of the designer and contractor if they are to provide scrutiny of build quality on-site and highlight issues of non-compliance.

3.5.15 The cost of getting it right will be considerably less than getting it wrong with costs far higher when things have to be fixed retrospectively rather than getting it right first time. However, there will be many changes in the construction industry in the near future which will add to cost (e.g. net zero, SAP, phasing gas out, product prices) and the CPM will be another addition to costs.

3.5.16 The definition of high-risk buildings should be reviewed as there could be domestic projects that represent high-risk to the public e.g. residential projects digging down two levels below street level. High-risk buildings will not cover work which doesn’t currently require a building warrant and can be a risk e.g. re-wiring a house. There is an opportunity to learn from this role-out on how to improve compliance on smaller projects, although a consultee suggested that this type of role would not be viable on smaller projects. This raises the question of whether there should be a value where the role of CPM is not required?

3.5.17 The relationship with building standards verifiers is key as building standards guidance is open to interpretation so dialogue between these two groups is essential. One consultee would not like to see the privatisation of building standards as per the situation in England.

3.5.18 Penalties for non-compliance could be more severe to ensure compliance to the regulations including starting construction without a building warrant in place or failure to submit a completion certificate application.

3.5.19 There are questions which still need to be addressed including the legal position of the CPM if something goes wrong and who pays for work to be redone which is identified by the CPM?

3.5.20 While there are no details of costs or settlements available, some consultees referred to a considerable volume of building defect expert witness cases. This suggests that the ‘high-profile’ failures reviewed in Section 2 are only a fraction of the many cases of building failure, but that most are not widely reported.

3.5.21 Finally, it was suggested that there should be some pilot studies to test the role of the CPM and identify any potential problems. It was suggested that there would be less acceptance by industry if unforeseen issues arose which could have been identified through a pilot. Communicating the benefits of the CPM role will also be important to gain industry support.