6. Business case
The options for the future include the following. Each has been briefly described and associated with a set of pros and cons.
6.1 Do nothing
Pros – do nothing
- No implementation cost
- No further action required of the Scottish Government
Cons – do nothing
- Fails to improve public knowledge around the regulation of electricians
- Creates continued opportunities for poor workmanship and 'rogue trader' to operate
- Does not address the costs to the public and the Scottish government of defective installations
- Does not address the issue of a need for CPD for qualified electricians
6.2 Awareness Campaign
There is a desire amongst the EWG, the Scottish Government and the general public to raise awareness of the qualifications necessary and the need for competence in electricians.
Over two fifths (41%) of all respondents to this research are unaware that electricians do not need to have undergone any formal electrical training to practise their trade.
The viability of this option would depend on an extremely effective and long-running marketing strategy through multiple avenues. It would also need to clarify the difference or links between qualifications/approved routes or pathways and competence. This would also warrant a clear statement surrounding the definition of competence (does it mean 'approved' qualifications taken at any point in the past for instance, and what about regular assessments of competence?). An awareness campaign would need to be started, and maintained, regardless if this or any of the other options (below) are instituted.
Pros of an awareness campaign
- Will improve public awareness - enabling informed decisions when hiring electricians
- May reduce the opportunities for 'rogue traders' and for poor workmanship
- Has the potential to improve the status of electricians
Cons of an awareness campaign
- Does not prevent unqualified operations
- There is no guarantee all members of the public will become aware. Experience shows that such campaigns are extremely expensive if they seek to be effective.
- Does not address the issue of a need for CPD for qualified electricians
For the remaining options, the pro and cons listed below in section 6.3 would be carried over into 6.4 and 6.5. It is also noted that all of these options/activities will take time to develop and embed.
6.3 Protect Title
There is clearly a desire amongst respondents to this research (although mainly electricians) for the legal protection of the title of electrician.
It would require a pathway to support those electricians, who are competent but not qualified, through the required steps. It would require clarity around the scope of work (i.e. only domestic, or all industrial, commercial and domestic). A phased approach to implementation would be beneficial.
There would need to be legislative change establishing certain criteria including on prescribing qualifications and the competences therein, and an organisation would need to be charged with ensuring implementation and management of the database. The funding for the system would probably be possible through registration and annual retention fees. This organisation would to all intents and purposes act as a 'regulator' whose role is to enforce the register. It is usually advocated that an independent organisation holds this role. Another consideration is a professional or similar body, but independence and impartiality of the statutory organisation is often favoured rather than run the risk of the regulatory function being regarded as potentially being unduly influenced by the self -interest of the profession itself.
Pros – protection of title
- Protection of the public and the sector (as only qualified and competent electricians are operating under that title);
- Would reassure the public by instituting re-training/re-registration at regular intervals as per the Gas Safe programme;
- Promotes Scotland as leading the UK;
- Removes space for 'rogue traders' and low standards (as long as the systems of registration, access to information by the public, and enforcement via removal/fitness to practice is adequate);
- Would enhance the profession itself - only those who can prove their right to protection of title through completing prescribed qualifications, and demonstrating their knowledge and skills, can call themselves an electrician. This would add to the respect due to such an important and safety critical profession.
Cons – protection of title
- Will increase costs for individual electricians (but electricians ultimately and consumers will gain from the protection) but see point 6.6;
- Will involve additional costs for registration, databasing and websites, investigating complaints (legal costs), fitness to practice hearings, etc.;
- There is still no assurance that unqualified personnel will not continue to undertake electrical installations under a wide variety of different titles – including all those currently under suspicion, such as bathroom and kitchen fitters, handymen, etc;
- It would not necessarily reduce or prevent confusion among the public when presented with the logos of trade bodies, etc. and a key purpose should be in giving consumers confidence that when they use an electrician, that person is suitably qualified and competent;
- There would be costs required to institute the necessary system of re-assessment of skills and competence to provide public confidence in the title;
- If instituted within Scotland alone, there would need to be considerable cost and effort in checking individuals to ensure that those working in Scotland under the auspices of other nations' companies have also earned the right to be called an 'electrician';
- Unless associated with a requirement for regular re-testing and up-dating it would not necessarily reduce the amount of defective work being conducted by qualified and registered electricians – although if this emerges there could be a route to address such an event through complaints
- Would require a database to be accessible (on the internet) and constantly updated in order to ensure total public confidence as just protection of title will not prevent other trades from conducting electrical work. All it will do is prevent them from claiming to be electricians.
6.4 Licensing of Electrical Firms
Registration is, de facto, a licence-to-practise for individuals (protected by rules requiring up-dating and re-testing as under GasSafe).
It must be remembered, however, that domestic consumers often contract with a company and would wish to be assured that the firm is permitted to operate as an electrical contractor. Checking the registrations of individual electricians might be seen as an arduous prospect – especially where a company might use several different members of staff on a single job – whereas checking a single firm which is licensed to employ only suitably qualified electricians and can be penalised for shoddy work might appear to be preferable.
Firms would need to be insured or bonded to cover costs of repair and restitution. All businesses claiming to carry out electrical installation work would need to be registered. Whilst this option is regarded by the EWG as a task for the UK Government, it has been, nevertheless, discussed below.
Pros – licensed electrical firms
- Provides reassurance to the public;
- Is perhaps slightly less onerous for the public if licensing is "per company";
- Might serve to reduce the costs of defective installations;
- Would reduce or eliminate the incidence of low-cost competition for registered electricians from unqualified and rogue traders;
- Scottish Government already operates such a scheme – The Approved Certifier of Construction scheme – which could potentially be built upon and making it mandatory to join for all electrical contracting firms.
Cons – licensed electrical firms
- Costs to design and implement (requiring clear means of when a business is no longer fit to practice – due to Director bankruptcy etc);
- Would require web search databases to be kept up to date constantly;
- Would require a system of bonds or other financial penalties;
- Would require a system of investigation, discipline and appeal.
6.5 Licensing of Firms and Individual Registration
The final option would be a comprehensive system of registration and licensing for electrical firms, and registration for individuals under the "protected title" rules which include re-testing and re-registration.
Pros – licensing and individual registration
- Provides considerable reassurance to the public
- Will serve to reduce the costs of defective installations
- Would eliminate the incidence of low-cost competition for licensed companies and registered electricians from unqualified and rogue traders
- Would institute regular competence re-testing for electricians to ensure ongoing competence throughout an electrician's working life
Cons - licensing and individual registration
- Would require legislation to protect title and to require licensing of electrical companies;
- Would require web search databases to be kept up to date constantly – but a single holder of the register/regulator would be relatively easy for the public to remember and access all necessary information
- Would require a system of bonds or other financial penalties
- Would require a system of discipline and appeal
6.6 Business Case
The Scottish Government has a threefold overall set of strategic objectives of
- protecting consumers
- protecting scrupulous traders and creating an inhospitable environment for miscreants
- maintaining an environment that allows competition to thrive within the provision of electrical services.
The fundamental question – and the one set by the Scottish Government as a prime criterion for any recommendation from this report – is proportionality. What would be a proportionate response to the problems of defective installations of electrical supply and lighting?
The problem appears to centre around
- 400 accidental domestic fires per year – possibly four deaths and around 100 injuries.
- whether caused by qualified or unqualified personnel, the overall cost to the economy is likely to be at least £15m per year. If left un-addressed the problem will mount up in financial terms - £75m over five years and possibly twenty deaths; £150m over ten years and potentially forty deaths.
The effectiveness of five options in reducing or eliminating these impacts have been discussed above. The authors believe that:
- Protecting title might go a long towards helping, but in of itself would do little to prevent unqualified people using different titles to do electrical work.
- Protecting the title, requiring updating and re-registration could improve or maintain the competence of practising electricians but would, again, not resolve the issues of untrained, unqualified people undertaking electrical work.
Our research, albeit based on a limited set of data focussed purely in Scotland (and some consideration of other models elsewhere) has shown relatively significant costs and consequences from defective installations.
Again, acknowledging the research is limited in scope and coverage, this research has also demonstrated a significant belief among members of the public and electricians that there would be considerable benefits from regulation, and possibly licensing of electricians and their companies.
The annual ongoing cost (as outlined above) to the Scottish economy of defective electrical installations would seem to support a case for:
- statutory protection of title AND a comprehensive registration and licensing scheme involving elements such as an independent body to act as regulator and enforcer of requirements. Such a scheme would require individuals to prove possession of specified qualifications and completion of regular competence/knowledge tests as an essential part of any system of assuring competence in electricians, thus
- individuals would undergo periodic retesting and re-registration, and
- companies be licensed to undertake domestic electrical work against bonded or insurance-backed financial protection.
This research, while being unable to identify those who conduct defective electrical installations (i.e. as it seems it could be due to qualified and unqualified electricians as well as the general public) has shown at least 7,000 such installations occurring per year and a significant desire on the part of the public for reassurance that the electrician they appoint is fully competent.
Hence the recommendation is for all four options to take place: an awareness campaign supporting the protection of title, setting up a register than can be viewed by the public along with the licensing of firms and individual registration – in effect the whole bundle.
The main argument against a licensing/registration approach would be that it might not avoid ALL fires due to defective electrics. There would always be some caused by the general public and DIY (unless such work was outlawed) and there will always be accidents and omissions by qualified and licensed people.
But even if the action only cut incidence by half, the savings to the economy would be significant – around £7m per year, two people's lives saved every year and fifty cases of injury (with associated NHS costs) as well as clarity around and respect for the title of 'electrician'.
Registration fees of individuals at (say) £50 each per year would raise £1.1m per year and a licensing fee of £250-£500 per company would raise a further £1m to £2m per year. This income would be more than sufficient to make the licensing and registration system fully self-sustaining even allowing for free access to the database by the general public. Costs to the business or impact on the consumer has not been calculated.
The first case study in Appendix 2 provides some appreciation of the costs and benefits. The Security Industry Authority has very similar objectives of protecting the public and runs a mandatory individual licence system and a voluntary Business Standards scheme.
The costs of each option presented in section 6 'Business Case' have not been estimated at this stage but we would estimate the initial costs of the most expensive approach to be around £2m to £5m over two to three years. Against the five-year cost of defective installations to the Scottish economy of around £75m (five years), and the continued benefits for years to come, there would seem to be a reasonable business case for action.
Fundamentally, electrical work is a safety-critical profession, and this alone seems to justify statutory protection as a minimum.