Cowboy Builders to be tackled by licensing scheme?

Cowboy Builders to be tackled by licensing scheme?

Cowboy Builders to be Tackled by Licensing Scheme?

"Timing has a lot to do with the outcome of a rain dance"

You don’t need any qualifications or experience to set up as a builder in the UK.  While many builders are reputable and competent, the building industry continues to be plagued by cowboy builders who do shoddy, substandard work or defraud people of money.

For the average homeowner, or indeed the average small business, having building work done is a rarity and something they will only do once or twice in a lifetime, there is no knowledge of how to go about finding a contractor, supervising a construction job and of how to deal with the practicalities. Add to this the driver of getting work done as cheaply as possible and there is a market ripe for exploitation by unscrupulous and incompetent contractors. 

There is a huge amount of guidance out there on how to avoid the cowboys.  There are simple red flags to spot, like a builder who wants the contract sum in advance and/or in cash, or who offers an unusually cheap quote, or refuses to put anything in writing, or who turns up without proper safety equipment or insufficient site equipment. There are dozens of websites with really helpful information and guidance, and some websites who list cowboy traders county by county. Even Facebook has a rogue builders page.

It can however be extremely difficult to spot the cowboys and many people are left financially ruined as a consequence of a building project that goes wrong. Claiming money back is expensive, time consuming and is often unsuccessful, the builder may be bankrupt or the company can be put into liquidation.

To date the construction industry, and the government, have responded to this situation in a piecemeal fashion. There are lots of voluntary schemes and bodies which contractors can join, such as TrustMark, the Federation of Master Builders, the Considerate Constructors Scheme, the Confederation of Roofing Contractors or FENSA.  There are also compulsory schemes such as Gas Safe which have been really important in raising standards of installation. And the market too has responded with websites such as Checkatrade providing references for builders or websites where you can post details of a job and get quotes. This mishmash of websites, voluntary bodies, compulsory registration and trade bodies is more or less navigable by the sophisticated consumer, but still leaves a lot to be desired for the less experienced, the vulnerable or the elderly.

Has the time now come for a compulsory registration scheme for builders?

The Federation of Master Builders certainly thinks so and in July 2018 it published a report “Licence to build: A pathway to licensing UK construction” calling for a compulsory licensing scheme. It calls for a licensing scheme to be created and integrated into the proposed Each Home Counts Quality Mark Scheme being developed by the government. The proposed Quality Mark scheme is currently limited to the energy efficiency, retrofit and RM&I sectors of construction, but the Federation would like it extended to the whole construction sector and expanded to include compulsory licensing.

The Federation suggests a licensing system to apply to all types and sizes of construction work and to sole traders, companies and partnerships. It wants fees to be proportionate to the size and risk of the business and the licence to be renewable every 3 years.  It wants contractors to have to meet certain requirements, although it does not have a firm view on what these are to be.  It suggests a robust enforcement process to act as a strong deterrent against working without a licence and it suggests an online database accessible to the public.

The requirements it suggests for the scheme include passing some sort of test on health and safety knowledge, a financial security threshold, address and identity checks, a requirement for adequate insurance and an inspection of previous work to confirm compliance with standards of workmanship.

The government has been toying with the idea of a compulsory scheme for some time and in 2013 the Department for Business Innovation and Skills commissioned a report into how other countries license builders. The report is fascinating and examines how Australia (where different states do it differently), Germany, Denmark, the Netherlands and the USA (where again different states do it differently) deal with licensing and training requirements for contractors.  In Germany, for example, their scheme is very closely linked with their national system of vocational training, something which we lack here in the UK.

In July this year a task force was formed with the aim of driving the licensing scheme forward and refining and developing how it might work in practice.  Licence UK Construction is led by Liz Peace the former chief executive of the British Property Federation and has members from a wide variety of industry bodies.  It believes that a licensing scheme will

  • Remove incompetent and rogue traders from the industry
  • Offer a much higher level of consumer protection
  • Increase construction output to boost the wider economy
  • Drive up quality, professionalism and productivity
  • Improve health and safety compliance
  • Improve the image of the industry

There are a lot of questions to be asked and a lot of issues to be resolved before a workable scheme can be produced. Big players in the industry are unlikely to welcome a further level of statutory regulation which will add to their already significant regulatory burden.  And smaller players such as sole traders are also unlikely to be pleased. Margins throughout the industry are extremely tight and even for the competent builder extra expense and a further layer of time consuming rules might be the proverbial straw.   Against this additional load must be balanced the interests of consumers.

How interested the government might be in a compulsory scheme is unclear, and without strong government support nothing will happen in any event.  It is not likely to be an immediate high priority for whichever colour of government we have after 12 December.  This may change in 2020 so it is worth keeping an eye on the task force and what it produces.

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