The taskforce report, which will be sent to ministers this month, also suggests a standard contract for small works, a national publicity campaign for the Quality Mark and testing of staff for "competence".
The report, obtained by Building this week, was due to be agreed at a meeting on Tuesday. Construction minister Nick Raynsford, who set up the working group that wrote the report, is expected to put the ideas out for consultation, followed by a six-month pilot study, before the new system is implemented in summer 2000.
Senior industry sources said the government sees its cowboy crackdown as at least as important as Sir John Egan's Rethinking Construction report last year.
Raynsford is expected to adopt most of the recommendations in the report, but there is a question mark over the government's willingness to cut VAT on repair and maintenance.
The report says: "The group considers that a voluntary scheme would be more effective if accompanied by a reduction in the level of VAT on repair and maintenance work.
"Although it is understood that a reduction in the rate at which it is applied would be difficult given European Union regulations, it is considered that lowering the threshold would in itself be of benefit in creating a more level playing field." Reputable builders argue that firms that avoid VAT are attractive to customers simply because of they are able to offer lower prices, even if the customer is suspicious of their standards.
The key to the rest of the report is a Quality Mark system, which consumers would be advised to refer to when picking a builder. The proposals for cash compensation and a phone helpline stem from the Quality Mark idea.
Contractors would get the mark after being assessed by an accreditation body that could be run by an existing trade association. To win it, staff would have to be assessed as "competent", and accreditation could be withdrawn if customers complain.
The report says an industry body wanting accreditation to award Quality Marks might have to pay £10 000-30 000 to cover the cost of dealing with complaints.
Industry leaders are nervous about the possible costs of the new system to companies. As well as higher subscription rates to their trade associations, firms could be asked to make an initial contribution of £170, followed by £150 a year after that.
However, the report calls for the government to part-fund start-up costs. The report says: "It is recommended that the scheme is underpinned by a comprehensive financial protection mechanism, with a de minimis level of [£100], to provide the consumer with an effective means of redress." It explains that the contractor should first attempt to remedy the customer's complaint, but that if all else fails the mark will be withdrawn. However, the report does not explain where the financial compensation could come from.
Explaining how consumers might find out about the mark, the report says: "There should be a single, approved list, available nationally through a low-cost telephone number as well as other appropriate media.
"Government [should] devote substantial resources to the publicity campaign. There is already concern that there will not be enough cash available for an effective campaign." The report also calls for the government to strengthen the Fair Trading Act 1973 and the Trade Descriptions Act 1968. The working group is particularly keen to see the Fair Trading Act streamlined to allow quicker prosecution of repeat offenders.
Industry leaders are broadly supportive of the report, although some are nervous of the testing of individual staff's "competence" on site rather than a firm's overall probity.
Ownership of the mark is unclear, with some worried that administration by the Construction Industry Board would not reassure consumers.
Key taskforce recommendations
- “Quality Mark” to be used to compile a national database of accredited firms
- National advertising campaign to inform public of Quality Mark
- Staff to be tested to establish “competence”
- A reduction in the rate of VAT payable on repair and maintenance work
- Compensation for bad work