Building standards - compliance plan manager role: development of scope

4. CPM Implementation Considerations

1. This chapter explores aspects of how the CPM role might be implemented in practice, including labour market considerations whether the role should be held by an individual or entity; risks and considerations around ensuring the CPM retains independence; matters relating to PII; and other practicalities and risks associated with implementing the CPM role.

4.1 Labour market considerations and time commitment

NB: The potential market in terms of existing job roles is covered in section 4.5 – Pathways into the role.

1. Based on the Scottish Government’s estimation that approximately 5% of 40,000 building warrant applications (on average) per annum are classified as HRB projects, that would equate to 2,000 such projects. Looking across a sample of four professional bodies (not intended to be an exhaustive list), membership numbers would appear to be just short of 20,000 individuals in Scotland. These span: the Royal Incorporation of Architects in Scotland (RIAS) – 5,000 members^[12]; the Royal Institution of Chartered Surveyors (RICS) – over 11,000 members^[13]; the Chartered Institute of Building (CIOB) – 2,500 members in Scotland^[14]; and the Chartered Institution of Building Services Engineers (CIBSE) – 1,100 members in Scotland^[15]. If 10% of these individuals were to meet the requirements of the CPM role and become role-holders, that would equate to a pool of 2,000 available individuals.

2. Stakeholders are generally consistently in the view that the number of CPMs needed in Scotland at any one time, coupled with the time commitment needed per HRB project, will be driven by the number, scale, complexity and geographical distribution of in-scope HRB projects, which would not necessarily be constant.

3. It is felt that the concentration of HRBs in urban areas will inevitably lead to increased demand for CPMs in those areas, particularly across the central belt of Scotland such as Glasgow and Edinburgh, extending to Dundee and Aberdeen.

4. These variables, combined with current uncertainty around the proportion of professionals likely to fully meet the requirements and be interested in taking on the role, make it difficult for stakeholders to quantify what demand for the CPM might look like; the number of projects that a single CPM would be expected to manage at any one time; and whether less or more than one full time equivalent CPM (individual) CPM is needed for a particular project.

“Depending on the project, you could end up with one full-time CPM, a team of CPMs, or a CPM working on a particular project for one day a week.”

Wider built environment stakeholder

“Do you need a CPM for every building, or could a CPM cover several buildings and projects at the same time under their supervision?”

Local authority verifier

“In a block of 100 flats, one person will not be able to see all 100. So it is important to agree the scope of what should be inspected and where. These will need to be spot checks, otherwise you will end up with 100 CPMs for such a project.”

Industry professional

5. A fifth of interviewees mentioned that that the CPM should be a full-time position working independently of other job roles. The idea is that this would allow them to be present on different high-risk projects as and when needed and to plan availability at key stages of the construction process.

6. Two verifiers see the role as operating on a part time, contract or freelance basis responding to particular requirements on a project as they arise.

7. In terms of labour supply, the size of the available market is also difficult for stakeholders to assess since this will depend on the finalised role description and pre-requisites. Several interviewees were keen to point out that the greater the breadth and depth of knowledge required, the greater the risk that the role requirements would go beyond what many individual professionals could offer and restrict the potential applicant pool.

8. Furthermore, there is some concern that should the list of CPM responsibilities appear too onerous, this could be a deterrent to some wanting to take on the role. On that basis, interviewees note that careful consideration should be given to salary, so it is commensurate with the proposed responsibilities and extent of liability.

“I’m not sure how many people would want to take on the role. It looks quite onerous and could be confrontational at times with the contractor and design team.”

Industry professional

“There might be difficulties in finding people interested in taking on the role as it looks quite cumbersome, but it will be welcomed.”

Local authority verifier

9. One professional body made the point that the knowledge and experience requirements should not be too Scotland-centric (e.g. not directly referring to practical experience of working as part of the Scottish building standards system) so as not to alienate potential applicants from further afield.

10. Another suggested that there should be a contractual agreement between the CPM and the project manager in terms of what activity would be carried out and when.

11. Several verifiers expressed concern that implementation of the CPM role could saturate available skills in the sector.

“There aren’t currently enough staff to cover existing roles and we are struggling with employing experienced surveyors at the moment. This role could further dilute the field of qualified people.”

Local authority verifier

4.2 Individual role-holder or entity

1. Interviewees were asked whether they believe the role of CPM should be held by an individual or an entity.

2. Around four fifths of stakeholders feel that the CPM role should be open to an entity, since this would likely make it easier to obtain professional indemnity insurance (PII) through the organisation; ensure sufficient availability of specialist skills in the team; take some of the accountability burden off the individual; and allow for contingency planning should a CPM be unavailable to attend a project or leave the organisation.

3. Three local authorities and a professional body suggest that the role ought to be offered as a service through architecture and surveying firms, emphasising that, if this were to be the case, it is vital that they remain impartial and independent to avoid any potential conflicts of interest.

4. Appointing an entity would also help to mitigate concerns raised by a number of stakeholders, including the PBG, that one individual might be unable to meet the full range of knowledge and experience required of the role. Instead, a team of CPMs with different specialisms relevant to their experiences could work together and provide the opportunity for peer quality checks.

5. Other interviewees made the point that an entity might still de facto be an individual (depending on organisation structure) and therefore one form should not preclude another.

“Even though the CPM will be working with the top 5% of projects, there will still be some that are more complex than others and are multidisciplined. This could require multiple CPMs with different expertise. This would allow mistakes to be highlighted where they might otherwise risk having been overlooked.”

Local authority verifier

“For larger and more complex buildings, if it was just one individual CPM then they’d likely struggle to have all the skills, time and experience necessary to discharge this function.”

Wider built environment stakeholder

“It needs to be an individual who holds the responsibilities, but is working for and represented by an entity. This will help with insurance and liabilities.”

Professional body

6. Several interviewed stakeholders referred to the building standards certification scheme as a good model to follow, which allows individuals to find an approved designer or installer through a list of approved bodies. Advertised benefits of that scheme, identified through Value of Certification research conducted by Pye Tait Consulting for the Scottish Government in 2022, include confidence in the quality and compliance of building work due to the qualifications and experience of certifiers; PII; and a robust audit and complaints system in place via scheme providers – for Certification of Design this includes BRE Global Ltd., RIAS Services Ltd., and SER Ltd, which the Scottish Government oversees.

7. A minority of stakeholders suggest that the CPM should report to, and be audited by, the Scottish Government, to ensure the CPM remains fully impartial.

8. Of the fifth of interviewees who feel that the CPM should be a named individual, the main perceived benefits are greater clarity around accountability, where responsibilities lie, and decision-making processes.

9. One local authority made the point that there may not be enough market demand for the CPM to warrant the role being held by an entity with multiple practitioners. Indeed, this may also come down to the potential fee attractiveness; number of existing employees and their range of skills; and how much work and cost an existing organisation might need to undertake to go through any agreed process.

“Having multiple CPM representatives visiting sites might cause confusing and reduce their accountability if different decisions are made by different people. One CPM should be assigned to each project, which will allow them to develop a relationship with both the contractor and the client.”

Local authority verifier

“It depends on the volume of the work, but I suspect it won’t be high enough so the role is likely to be held by individuals.

Local authority verifier

4.3 Maintaining independence

1. PBG members, supported by interviewed stakeholders, stressed that the CPM needs to be impartial and independent from the developer/contractor so that there are no conflicts of interest or undue influences placed on the CPM. This makes it important to prevent a situation occurring where the CPM’s independence might be compromised, such as the builder/contractor, where they are also the owner/RP, appointing the CPM.

“This is a serious concern – it could turn the CPM’s focus to getting paid and pleasing their employer. In other words, if you upset [the employer], you won’t be getting any further work.”

Industry professional

2. Around a third of interviewees mentioned that the CPM’s responsibilities in relation to the contractor should be established through a contractual agreement at the outset that rules out any conflicts of interest.

3. Others argued that the CPM should neither be appointed nor directly employed by the builder/contractor or the owner directly. One professional body also proposed that the terms of CPM appointment by RPs should be standardised (approved by the Scottish Government) and protected by Statute to be independent function.

4. A fifth of interviewees advocate the CPM being appointed and managed by the local authority rather than necessarily the RP but paid for by developers. Several local authorities were keen to stress that the CPM role should not become a de facto extension of local authority building standards responsibilities.

5. Some argue that it shouldn’t matter who appoints the CPM, as the nature of their role is to ensure compliance and act in public interest, not with a client focus.

6. One professional body proposed that the terms of CPM appointment by RPs should be standardised (approved by the Scottish Government) and protected by Statute to be independent function. It should be noted that the Scottish Government has not historically entered into the contractual area, which it sees as a legal matter between the person appointing the service and the service provider.

“There has to be something for the CPM to sign to show they’re independent, in an up-front contract between the CPM and the builder.”

Local authority verifier

“The only solution is to develop culture of collaboration instead of competition among different parties and elements of a construction project – have them all moving in the same direction.”

Professional body

4.4 Professional indemnity insurance (PII)

Importance of PII cover for the CPM

1. PII provides cover against claims made by clients against practitioners for wasted costs, remedial work or any other losses they believe they have suffered. The Review Panel on Building Standards Compliance and Enforcement previously noted that when a completion certificate is submitted to the local authority, it should be produced by appropriately qualified professionals with PII cover in place.

2. The PII journey typically spans three main stages: i) an individual will assess the marketplace available to them and approach a range of brokers who will request information about fees, claims and incomes associated with the project being covered; ii) the individual will purchase a package applicable to the size, risk and category of the project – modifiable based upon the level of cover desired (e.g. including/excluding fire engineering cover); and iii) if a fault is noted within the building that the individual has worked on, a claim can be made and the PII policy enforced will be triggered – with the potential to cover past buildings that might also be affected.

3. Insurance stakeholders interviewed for this research mentioned that larger brokers will potentially have the capacity and funds to provide PII for larger projects, while smaller brokers will likely have more exclusions in their cover.

“There are professional brokers who work and operate in this space who have a bigger portfolio of businesses – they will be able to provide the architect, designer etc. with meaningful capacity, but it depends on the nature of the firm. Some firms may only cover fire engineering; others may only cover a singular discipline; while some could be multidisciplinary and provide the full cover desired.”

Insurance industry representative

Current PII market conditions

1. All interviewed insurance representatives made the point that, since high profile building failures such as the Grenfell Tower tragedy, PII has become far more expensive and harder to acquire. Two commented that many insurers have since withdrawn from the PII market on the basis of it being no longer profitable or attractive.

2. One representative asserted that “within 18 months of the Grenfell fire, 50% of the PII market disappeared and premium costs went up by 400-800% as a result.” Two also noted that there has been an increase in the number of exclusions in PII cover, for example cover for fire safety and cladding products has been significantly curtailed or excluded.

“Many providers in the market that just can’t do the work. You just can’t easily buy fire safety insurance in PII cover and the legal environment for it is horrid.”

Insurance industry representative

PII risk factors for the CPM role

1. Insurance stakeholders all broadly agree that the introduction of the CPM role has the potential to reduce the overall risk associated with HRB projects. This is based on the assumption that the CPM in question follows building regulations correctly and ensures the building is compliant within this scope. One noted that the role would bring additional discipline and oversight, which has the potential to positively impact the sector and lower the likely risk.

2. Where the individual CPM is concerned, the following would likely contribute to a decrease in the risk level:

• An exemplary track record and reputation;
• Proven competences and strong qualifications or certification levels;
• Good training procedures for the CPM;
• Clear role and remit;
• The CPM being on a register to prove they have met certain eligibility requirements;
• Who appoints the CPM.

3. The overall risk level could be affected up or down by factors such as confirmation of the liability extended to the CPM; what they would be held responsible for if the building had a fault; level of detail in the building regulations; building height; and coverage needed in relation to fire safety/use of cladding.

“If the building regulations are flawed in any way, noting Dame Judy Hackitt’s judgment in the wake of the Grenfell Tower fire, I’m concerned we wouldn’t be able to rely on the CPM role to decrease risk – it sows the seeds of doubt.”

Insurance industry representative

“Qualifications, certifications, experience and competences are all vital. Experience is key in particular and competency has to be high for high-rise and high-risk buildings. They also need to have knowledge in the field and particularly for areas that are important, such as fire engineering. Ideally, they should be qualified in surveying. They also need ‘teeth’ so they are able to tell people when they mess up or if something is wrong.”

Insurance industry representative

4. Insurance stakeholders emphasised that it would not be appropriate to quantify the most appropriate level of cover or likely premium range for the CPM role as it will depend heavily on the size, complexity, number of buildings involved, fees, and associated risk for each project.

5. That said, insurance representatives have observed that most construction companies do not tend to buy more than £5 million in cover; and those who do are likely working on large projects or have clients who will assist with premium payments.

6. One suggested a matrix could be put in place to help calculate what level of insurance cover is needed based on different project variables (type of building, fees, etc.).

7. Finally, when discussing how the liability apportioned to the CPM role might affect PII premiums, one insurance stakeholder said:

“My general observation would be that the more ‘absolute’ the obligations placed on the professional carrying out the role, the more PII insurers will likely react in a negative fashion. PI insurers don’t like language in contracts that talks about professionals guaranteeing or ‘ensuring’ that, for example, a building is safe from a fire perspective. They prefer language that talks to the professional exercising all ‘reasonable skill and care.’”

Insurance industry representative

Whether PII should be made a statutory requirement

8. Non-insurance industry stakeholders interviewed for this research were asked whether they thought PII for the CPM role ought to be a statutory requirement set out in legislation or driven by industry.

9. The majority believe that PII should become a statutory requirement given the potential seriousness of a claim for an instance of non-compliance on a HRB; and the question of who would be responsible for the financial burden of building errors or claims if the CPM had no PII cover. This ties in with the question of how liability would be defined. Importantly, these stakeholders argue that making PII a statutory requirement would be in the public interest and reassure all parties that compliance is maintained throughout the build.

10. A third of stakeholders feel that the industry would organically drive demand for PII without it being a statutory requirement. On that basis it is argued that even if PII were optional for the role, it would be hard to imagine any CPM not taking it up, especially if it were to become a condition of contract on HRBs.

“[PII] will be driven by the RP and the market. I would imagine that any sensible RP is going to ask for some form of PII.” It’s unlikely that they would want to have their completion certificate signed by a CPM without PII to offer legal protection if there is any involvement with the courts.”

Industry representative body

11. Remaining stakeholders were unsure whether they felt PII should be made a statutory requirement, with some noting that it would depend on the availability and cost of cover within the market.

12. Some stakeholders, primarily professional and industry bodies, believe that the limitation of liability for the CPM role would need to be more clearly defined before being able to judge whether PII legislation ought to be put in place.

“The insurance market will provide PII if it’s needed so it doesn’t need to be compulsory. The CPM would get PII [on their own] anyway. The issue would be the price or competency to deliver if the trade is a statutory market. This wouldn’t be profitable, and it would be difficult to obtain if the market becomes saturated.”

Wider built environment stakeholder

13. One professional body suggested that the Scottish Government ought to consider putting in place some form of government insurance scheme with a charge up front to developers. This, they feel, would do more to secure public confidence than expecting the building owner to pay for this.

14. Insurance industry representatives expressed concern that making PII a statutory requirement could leave the insurance market unable to meet demand, exacerbated further by existing industry hesitancy in offering PII in the wake of the Grenfell Tower fire. This in turn could drive up premiums.

4.5 Other implementation practicalities and risks

1. Aside from the prompted discussion around independence, the most commonly mentioned implementation consideration among interviewees is ensuring full understanding of the CPM’s role and responsibilities among all stakeholders involved in a building project to endure clarity on the CPM’s place, the limitation of liability, to manage expectations minimise the risk of misunderstandings.

“Contractors may think they don’t have to take responsibility for compliance if there is a CPM, and that it would transfer ownership of risk and shift the blame to the CPM. This would undoubtedly end up with the wrong people being punished if there are failures”

Wider built environment stakeholder

2. Some interviewees foresee a risk that the CPM may not be warmly welcomed by certain construction contractors if seen as increasing the amount of supervision, checks and instruction, or “another hoop to jump through.” One industry professional mentioned a worst-case scenario of potentially unscrupulous contractor attempting to fabricate compliance or deliberately deceive the CPM.

3. Other interviewees feel this should not be an issue given that, particularly in the wake of high-profile building failures, there is a greater understanding now across the sector of the importance of compliance and implications of getting it wrong. A wider built environment stakeholder emphasised the importance of ensuring the CPM role isn’t perceived as cutting across the core responsibilities of other roles, and rather that it is seen as working alongside existing roles, smoothing the construction process and relieve existing burdens.

4. Notwithstanding these issues, there will likely be teething issues, as the introduction of the role will change operations on site which are likely to cause additional costs and delays, especially in the early days.

“People in general don’t like change as its someone else that they have to satisfy.”

Industry professional

“The role will be received fine as construction managers have different attitudes now, towards building compliance, including from an ethical standpoint.”

Local authority verifier

5. Other implementation considerations include:

• How to mitigate the risk of decision-making processes and project timescales becoming elongated due to the integration of an additional set of processes;
• Fee considerations, including how the CPM fee would be set and paid;
• Transition arrangements where a CPM on a project changes, and whether the new CPM would inherent liabilities from the former CPM;
• Travel expectations for the CPM, for example HRB projects located in areas where there may be a lack of available professionals in the role, particularly in the early days of implementation;
• Marketing and promotion of the CPM role to ensure its role and importance on HRBs is fully understood and valued by all project stakeholders;
• Having in place a clear long-term strategy and implementation plan for the CPM role, with one professional body asserting that it should be limited to HRBs using clear and specific definitions given the risks involved, and with acceptance of a two-tier system; and another questioning why not roll it out to all buildings.

6. The PBG is keen to advocate the importance of putting in place independent scrutiny to ensure public safety, particularly in the wake of identified failures in the past. It is felt that this overrides potential cost barriers and was a view echoed by certain other interviewees.

7. A certification scheme provider mentioned that mandating the role through legislation (as is intended in the case of HRBs) would be a positive step towards successful implementation and risk reduction.

“The role will be received well by members of the public and by those who are responsible for owning and managing projects, as well as by fire engineers, consultants and designers. It could be seen as an inconvenience to contractors, who may be more resistant but they are starting to enhance the level of checks.”

Industry professional

“I think that cost should be secondary consideration because we are trying to improve quality and public safety.”

Professional body

“The CPM complements the verifier as a public service, which should be paid via standard fee scales determined by the Scottish Government and not fee competition.”

Professional body