Will the new regulator have the teeth it needs? And what about product testing?
A new construction products national regulator is imminent. Housing minister Robert Jenrick announced the new tsar’s creation following what he described as “deeply disturbing allegations of malpractice by some construction product manufacturers and their employees, and of the weaknesses of the present product testing regime” in evidence given to the Grenfell inquiry.
The regulator is to have strong enforcement powers, including the power to remove any product from the market presenting a significant safety risk, to prosecute any companies not complying with product safety rules, and to conduct its own product-testing when investigating concerns. Businesses must ensure their products are safe before being sold, in addition to testing products against safety standards.
The regulator will operate within the Office for Product Safety and Standards, which will be expanded and given up to £10m to establish the new function. It will work with the Building Safety Regulator and Trading Standards to encourage and enforce compliance.
The government has also commissioned an independent review to examine weaknesses in previous testing regimes for construction products, and to recommend how abuse of the testing system can be prevented. It will be led by a panel of experts with regulatory, technical and construction industry experience and is to report later this year with recommendations.
Dame Judith Hackitt’s final report of May 2018 recommended that “the government should ensure that there is a more effective enforcement, complaint investigation and market surveillance regime with national oversight to cover construction product safety”. What the minister’s announcement does not say, however, is when the fine print, setting out the regulator’s job description and powers, will be available.
A regime is one thing; being able to operate it effectively is another. Up to £10m does sound like a good start, but will it be enough?
The devil is usually in the detail, and the challenge in framing the new tsar’s powers is to ensure they are adequate to deal with the issues that have hit the headlines and disturbed Jenrick. The UK Accreditation Service gave evidence on the draft Building Safety Bill to the housing, communities and local government select committee, providing a sharp warning that the regime must be watertight to avoid abuse. It said the construction industry “is a very competitive marketplace and there is always the temptation to cut corners or find loopholes […] If there are loopholes, the industry will find them and exploit them. Grenfell Tower is a stark illustration of this […] What has been missing is a sufficiently robust regulatory regime.”
Which brings us to resources. A regime is one thing; being able to operate it effectively is another. Up to £10m does sound like a good start, but will it be enough when considered against the volume and nature of products to be policed? The Construction Products Association (CPA) says the UK construction products industry provides 373,000 jobs across 24,000 firms and has an annual turnover of more than £61bn, and that 76% of all construction products used in the UK are made in the UK. The new tsar will have a lot to do.
Then there’s testing – a fundamental ingredient of the regulatory regime but currently one with weaknesses, as Jenrick acknowledged, as it only covers construction products where there is a harmonised EU standard in place, so that certain safety-critical products, such as aluminium composite material (ACM) cladding, fall outside it.
The select committee’s report welcomed the draft Building Safety Bill, but, noting that a future testing regime for construction products was missing, recommended some improvements, not least that the government should publish, with the bill, its proposals for improving product testing. Several organisations, including the Local Government Association, told the committee that the bill did nothing to address the lack of resources and testing capacity in the UK and that this could impede the rollout of any new testing regime.
The Insulation Manufacturers Association, in particular, warned that “the capacity for testing construction products with accredited laboratories in the UK is already stretched” and that “before introducing more testing regimes the government will need to be sure that testing capability is ramped up”. And the CPA submission recorded “great concern from many quarters that the bill is angled towards individual products and that systems are ignored […] a system approach is required.”
The committee recommended that the government establish the capacity of the UK testing market and, if necessary, provide funding to increase it – another resources issue for the promised independent review to get its teeth into.
Jenrick’s announcement is welcome news but the next steps are crucial. What will the new regime look like? Will the new tsar and testing regime be given the necessary teeth and funding to fulfil their functions? Almost four years after Grenfell, there will be pressure on the government to put an operable and effective regime in place without delay.
James Morris is a partner in Mayer Brown’s construction, engineering and international arbitration team in London