The expected consultation on secondary regulation to support the implementation of the Building Safety Act did not arrive before the summer recess of Parliament. Despite this, the Building Safety Regulator (BSR) remains (at the time of writing) committed to pressing ahead with the new Gateways in October.
The Infrastructure and Projects Authority in its Annual Report gave an amber warning about the readiness of the BSR and I think we would be hardpressed to give more to the industry. There were teething issues and problems at Gateway One; Gateway Two is more complex and there is less clarity about what good looks like, so delays are inevitable. That said, the fundamentals of compliance haven’t really changed and FIS has steadfastly focussed on its “the three P’s” Product Process People framework, zoning in on gaps in evidence and common compliance concerns, competency and unpicking the golden thread with digital information.
There are positive signs. I am certainly experiencing greater collaboration in our sector (Covid-19 aside) and I believe things are starting to fall into place. But there is another P that continues to undermine best efforts – Procurement. Procurement teams just don’t seem to have gotten the memo that change is required!
Three key conclusions from the research FIS commissioned with the University of Reading are:
• Contractors suffer from regressive procurement practices and poor practices in terms of payments and retentions.
• Risk dumping is widely implemented through the inclusion of onerous clauses in supposedly ‘standard’ forms of contract. Indeed, the very concept of a standard form of contract is to all extents and purposes almost dead.
• The result is that too often contractual risk is being assigned to relatively undercapitalised subcontractors. Such firms are ill-placed to carry the associated liabilities and often lack the necessary professional indemnity insurance.
And if we are honest progress here is slow. Despite the RIBA Plan of Works recognising the vital role of specialists in the design development process and a fundamental need to focus buildability that has routinely tripped up construction and necessitated the “site fix”, I still routinely hear in meetings “that can’t work, because that is not how we procure construction”. This will be a big problem at Gateway Two. Building Control will
be looking for developed designs and clear programmes including competency matrices. It is hard to see how projects will make it through Gateway Two to construction if critical details like internal wall systems are not fully detailed and the supply chain is not appointed.
Beyond Gateway delays (which will only impact higher risk buildings) procurement is limiting the change we need to see in insurance. Insurance reform could help to accelerate transformation across the market, but again little change is evident. I now believe the Professional Indemnity market is broken, I certainly believe it is not fit-for-purpose, but apparently one of the reasons we can’t adopt a more warranty or project-based approach is that the project team would have to be assembled far earlier… and “that is not how we procure construction”.
Project insurance leans on different and in my opinion better contracts that manage collective responsibility (much more in keeping with the accountability aspects of the Building Safety Act). But rather than assemble project teams well in advance and work out how we manage fluid start dates, apparently, it is easier to carry on with everybody paying for indemnity insurance which actually adds to the confusion about who is responsible for what.
Apparently, project insurance is expensive, but I question whether it really is more expensive than the overlapping cover we are all paying for. I am convinced project insurance would be cheaper if you take into account the sham that is standard contracts, which necessitates us paying lawyers to write complex schedules of amendments that we need to pay lawyers to explain and ultimately in all the confusion creates disputes which are settled by lawyers!