Impact assessment shows estimated costs of new regime for ‘higher-risk’ residential buildings

The cost to industry of meeting new building safety regulations for high-rise residential blocks could reach nearly £3bn over 15 years, a government impact assessment has found.

The Department for Levelling Up, Housing & Communities (DLHUC) lastweek published its response to consultations on several regulations under the Building Safety Act, including provisions for the ‘golden thread’, information needed to attain a building-assessment certificate and duties to engage residents.

The government, alongside secondary legislation to bring the regulations into law, published an impact assessment showing costs of the new regime, which applies to blocks at least 18 metres in height or have at least seven storeys and contain at least two residential units

The impact assessment sets out three cost estimates for the industry.

Its ‘low’ estimate is a cost to industry of £1.24bn over 15 years, its central, or ‘best’ estimate is £1.82bn and its ‘high’ estimate is £2.9bn.

The assessment shows new rules requiring building owners or managers to produce safety cases for buildings will be the costliest area, with a central estimate of £830.9m.

Requirements to engage residents, including providing them with accurate and up to date information, are the second area of with the highest expected cost. This is followed by the requirements on dutyholders-defined as clients, principal contractors and principle designers - to maintain a “golden thread” of information about a building throughout its lifecycle.

The cost to the building safety regulator, currently the Health and Safety Executive, is expected to be £356m. This is in addition to the industry estimates.

The government has also announced that the ‘golden thread’ information does not have to be stored on one system in order to be considered a “single source of truth” as required.

 Cost estimates (£m) 
Area of activity Low Central High
Accountable persons 48.4 60.5 72.6
Building-assessment certificate 6.1 8.5 11.3
Golden thread 268.3 363.4 458.6
Safety cases 493.3 830.9 1,535.20
Enforcement 8.4 10.6 12.7
Reviews and appeals 2.1 2.6 3.1
Mandatory occurrence reporting 3.5 4.3 5.2
Residents’ voice 404.3 540.3 810.5
General familiarisation 1.3 2.7 3.8
TOTAL 1,235.70 1,823.80 2,913.10

Source: DLUHC impact assessment

DLUHC said its decision followed “feedback from stakeholders about their use of multiple systems and how this can deliver effective outcomes”

The government has also said it will not mandate a system for sharing and collecting golden thread data as this would not be “proportionate”, although it acknowledged “concerns about not mandating standards for structuring information, data coding or an index structure”.

It said: “There are many different existing standards and data dictionaries already in use across industry.

>>See also: We are entering a new era for building safety: but are we ready for the new regulator?

>>See also: Long process: How compliance with the new products code will be verified

“Mandating a specific standard or data dictionary could impose unnecessary costs on accountable persons to update their information and records to meet with the new requirements, and these costs could be passed on to leaseholders. If accountable persons are already ensuring their information is consistent and up to date, the government does not consider it a proportionate approach to require them to implement a new system.”