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Taking the Red Tape Challenge
Housebuilder – March 2012

Mark Smulian looks at the two initiatives currently underway to ease the red tape burden on the industry. Will they work or are they just fiddling around the edges?

Whitehall would have gone up in flames years ago had every politician who promised "a bonfire of red tape" delivered.

Red tape, in the shape of regulations, codes of practice and guidance, has a habit of growing.

For housebuilders, there are the Building Regulations, codes such as that for sustainable homes, standards such as Lifetime Homes and those for space, and assorted requirements imposed by planners.

These obligations, the industry argues, are impacting on the viability of new homes developments - an argument that seemed to gain some traction with government last year when the Plan for Growth included a drive to reduce regulation on the industry.

housebuilders sceptical

Recent plans to amend Building Regulations and the introduction of the Flood and Water Management Act seem to actually add to the regulation burden, and housebuilders are sceptical that the situation will change.

But two current initiatives are seeking ways to cut the thickest of red tape and make sense of inconsistently imposed standards - they are the Cabinet Office's Red Tape Challenge and the work of the Local Housing Delivery Steering Group under the chairmanship of Sir John Harman.

Unfortunately, but perhaps not altogether surprisingly, they are proceeding in isolation from each other.

The Red Tape Challenge is moving from industry to industry every few weeks, inviting people to nominate cuttable red tape via a website.

Two "sector champions" have been named by the Department for Communities and Local Government to try to rationalise the myriad resulting grievances into a coherent package of regulations for change or abolition.

They are Simon Randall, a former Conservative councillor in Bromley and a lawyer much involved in social housing, and Stephen Greenhalgh, who is about to step down as the Conservative leader of Hammersmith & Fulham Borough Council.

Neither claims any technical expertise in building, yet they will report to ministers, probably in the late spring, on how the Building Regulations and other industry codes might be changed.

Randall says they can look at anything except the planning system and taxation.

"We want to identify which regulations restrain operations, and then challenge those and seek to persuade ministers to annul those regulations that prevent homes being built, while also making sure we do not compromise on quality," he says.

Randall admits he will need advice on highly technical matters, but says "we will come to judgements by applying our common sense to challenge those regulations that could be abolished or amended".

They will also look at things that are not strictly speaking regulations, such as space standards, Lifetime Homes and environmental codes, "to see if anything could be done to accelerate the construction of quality homes at less cost without compromising on quality or the green agenda", he says.

These intentions have been heard before. Randall says the difference this time is that "ministers are clear that they want to reduce red tape to facilitate more houses being built quicker.

"They are determined to reduce regulation. This is a fantastic chance for the industry to say what needs to be changed."

Neither man, though, agrees with comments posted on the Red Tape Challenge website arguing that the Building Regulations should be swept away.

Greenhalgh says: "The question is, can we clear out red tape and create an environment in which people can build? Our role is to animate the discussion on this.

"We clearly need a building control system, but it is a question of whether we have one that is overregulated for no good reason. We are there to ensure there is sensible regulation, not no regulation."

Greenhalgh also wants to examine whether regulations are stifling investment by pension funds and financial institutions in the construction of private housing for market rent. Successive governments have sought to stimulate this sector of housebuilding, to little discernible effect.

"I'm particularly interested in looking at whether regulation prevents equity investment in housing association building and construction by the private rented sector," he says."There is clearly a problem there. It may not turn out that it is not a regulatory problem, but that's something we want to find out. If we could remove the barriers, we would see more homes built."

The second initiative under the Local Housing Delivery Steering Group (LHDSG) is looking at another perpetual source of controversy - the standards insisted upon by planners. The group includes both planners and housebuilders and chair Sir John Harman is also due to report in the spring.

When Housebuilder spoke to red tape champion Randall, however, he admitted he did not know of this group.

And equally when we spoke to LHDSG member Stephen Tapper, immediate past president of the Planning Officers Society, it was obvious that its deliberations would be separate from the Red Tape Challenge.

Left and right hands? It is hard to see how the two sets of conclusions will be co-ordinated.

The idea behind the LHDSG is that it will rationalise the unwieldy mass of local standards and ensure that local plans are not encrusted with demands for "gold plated" specifications for "nice to have" standards.

It will look both at local standards themselves and at their impact on viability. For example, if a council demands that each room in a home is built to a larger size than normal, or that there are more of them, or that Lifetime Homes sizes are met, there must be fewer houses built on any one site.

Multiply that across a council's area and the local plan is not "viable", because the number of homes demanded cannot be built.

The group will not have powers to tell local authorities what they can demand from builders, but it will produce guidance that should carry weight since it will have been determined by both planners and housebuilders. This group arose, ironically, out of yet another government deregulatory initiative, which had suggested a fixed list of housebuilding standards councils could impose.

Both sides disliked that: councils saw it as infringing their powers, while builders feared councils would impose everything mentioned. Tapper says: "There is quite a lot of agreement emerging in the group on things that could be done, but it is not easy.

"There is clearly overlap between many standards and that does not make for easy implementation." He points out that as soon as someone tries to light a regulatory bonfire, the complex interactions between standards create difficulties.

"All these standards come at things from different viewpoints, and some are not standards but ways of measuring homes like the Code for Sustainable Homes or Secured by Design, and they all have their own roles.

"There are some aspects of Lifetime Homes that housebuilders are happy with, as they are cost-effective, but how do you merge those together?" Tapper also points out that, armed with their localism powers, councils could still "impose more or less anything they want to, if they have an evidence base which they can put to a planning inspector".

tension

The Local Government Association, which speaks for councils, is also involved in the LHDSG, and its advice note to members shows this tension between councils' powers and the recognition that more homes are needed.

It said: "Councils are no keener than developers on unnecessary and confusing regulation. It is costly to enforce, may hold back desirable development, and may be ineffective."

Three cheers to that, perhaps, but it went on to stress that councils retain their full planning powers to use as they see fit. The problem with both initiatives though is that abolishing parts of regulations and codes can create more regulations elsewhere because the interactions between them are so complex to disentangle.

John Tebbit, industry affairs director of the Construction Products Association, says: "There have been people in the Red Tape Challenge saying they want to remove parts of the Building Regulations, but they (the Building Regs) are relatively concise, and necessary.

"For example, Part A says 'the building shall be constructed so that in the event of an accident the building will not suffer collapse to an extent disproportionate to the cause'. Well, which part of that would anyone want to repeal?"

Tebbit says the worst problems arise not in the regulations themselves, but in the associated guidance, which he says is "extremely complex because there are no rules on the competence, knowledge or intelligence of builders, so they have to be written for people who ought not to be allowed near a building.

"If you had some process of accreditation of builders they could be made simpler, but some might argue that would be another form of regulation," he adds."

John Slaughter, director of external affairs at the Home Builders Federation, also thinks the greatest issues lie not in the Building Regulations but in standards such as Lifetime Homes, which is "a private thing picked up on by the HCA and local policies, so it's quite tricky how you raise that in a 'red tape challenge' when there is this matrix of local and national bodies involved". Slaughter says there is a strong argument that the requirements of the Code for Sustainable Homes, for example, would be better as part of the Building Regulations "rather than a voluntary code which is applied haphazardly".

He explains: "That would give our members more certainty and a level playing field rather than a code that is applied differently in different places."

Slaughter also expects the HBF to use the Red Tape Challenge to object strongly to the SAP tool for assessing thermal efficiency, which he describes as "not fit for purpose and so you can end up with buildings over-designed to meet performance standards".

Both Randall and Greenhalgh, and Sir John Harman, are due to report this spring. The desire to cut red tape is great, but past experience suggests it is a lot easier to talk about abolishing regulations than it is to actually abolish them and not have others take their place.

Ministerial drive or not, will it really be different this time?