Building Safety (Responsible Actors Scheme and Prohibitions) Regulations 2023

Debate between Baroness Scott of Bybrook and Lord Naseby

Tuesday 20th June 2023 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)]

My Lords, these regulations establish a responsible actors scheme for developers under Sections 126 to 129 of the Building Safety Act 2022, focused on the remediation by developers of historic fire safety defects in residential buildings they have developed in England. Developers that are eligible for the scheme but choose not to join, and developers that join the scheme but then renege on their membership commitments, will be prohibited from carrying out major development or obtaining building control approvals.

Following the Grenfell Tower tragedy, it became evident that thousands of residential buildings over 11 metres had serious fire safety defects. This put resident safety at unacceptable risk while leaving many leaseholders facing potentially life-changing remediation costs. This scheme is one part of the Government’s wider response to the building safety issues that came to light following Grenfell. In addition to the scheme, we are protecting residents by investing £5.1 billion in remediating unsafe cladding on 18 metre-plus buildings; securing industry contributions to remediation through introducing a building safety levy; implementing statutory leaseholder protections against unfair costs of remediation; and creating new legal avenues for affected parties to recover remediation costs from those who caused the problem.

This scheme focuses on major private sector developers, which sit at the top of the supply chain and have overall responsibility for their developments. The Government engaged with major developers through a remediation pledge and then a legally binding developer remediation contract. I welcome the action taken by 48 developers that have signed the developer remediation contract; these include the top 10 private sector UK housebuilders. The scheme will create a level playing field whereby eligible developers that commit to remediate are not placed at a competitive disadvantage compared with those that do not.

The regulations set out three descriptions of persons who are eligible to join the scheme. Developers based anywhere may be eligible for the scheme, if they developed relevant buildings in England. First, major housebuilders are eligible where their principal business has been residential property development; they were responsible for the development or refurbishment of one or more 11 metre-plus residential buildings in England in the 30 years ending 4 April 2022; and they meet the profits condition set out in the regulations. Secondly, developers are eligible where they meet the profits condition and they were responsible for the development or refurbishment of at least two buildings that we know are defective because the buildings have been assessed as eligible for a relevant government remediation fund. Thirdly, there is a voluntary eligibility provision. This allows other persons to join, where they were responsible for the development or refurbishment of a building that would require remediation under the developer remediation contract.

The profits condition is focused on typical operating profits averaged across the three years from 2017 to 2019, which were not impacted by the Covid pandemic. Both the profits condition and other aspects of the eligibility provisions make appropriate provision for the complex company group structures used by some developers.

The regulations make clear that registered providers of social housing are not eligible for the scheme. They will not be invited or permitted to join.

The core conditions of membership of the scheme are for developers to commit to identifying and remediating life-critical fire safety defects in residential buildings over 11 metres in height that they developed or refurbished in England in the 30 years ending on 4 April 2022, and to reimburse taxpayers for government-funded remediation of such buildings. To demonstrate their commitment, an eligible developer must enter into a self-remediation contract: a contract containing the terms of the developer remediation contract published by the Secretary of State in March this year. The membership conditions require members to give effect to their remediation and reimbursement commitments in accordance with the contract’s terms.

I turn now to the application provisions. The Committee will be aware that the Joint Committee on Statutory Instruments has drawn attention to two technical aspects of the drafting of these regulations, including one relating to the scheme’s application provisions. I am grateful to the Joint Committee for its time, its valuable scrutiny and its report, which the Government have carefully considered. We have corresponded with the Joint Committee and provided a memorandum setting out our position, which is printed as an appendix to the Joint Committee’s report.

I welcome this opportunity to reaffirm our overall position on the issues raised, as explained in the memorandum. On the application provisions, we consider it to be clear in context that, where the Secretary of State identifies that a person is likely to be eligible for the scheme, they will be invited to join it, but the registered providers of social housing will not be invited to join, as they are not eligible under Regulation 6. In light of the Committee’s report, we will monitor implementation carefully and consider bringing forward amending regulations in the event that the regulations give rise to a misunderstanding in practice as to who is invited or able to join the scheme. The Government will also issue guidance on aspects of the scheme. However, the issue of developer remediation of unsafe buildings is urgent, and I seek the Committee’s approval of these regulations today.

The regulations set out the time period to join the scheme and give developers an opportunity to make representations if they believe that they are not eligible. They also set out how developers can join the scheme in other circumstances, including under the voluntary eligibility provisions.

Membership of the scheme may be revoked for breach of membership conditions or ended without fault where a member has substantially satisfied their obligations. Members will have the opportunity to make representations to the Secretary of State before their membership is revoked. Should an eligible developer decide not to join the scheme by the end of the application period, or should their membership be revoked for failure to comply with the scheme’s conditions, they will, in accordance with the regulations, be prohibited from carrying out major development or obtaining building control approvals.

At this point the developer, and known persons controlled by the developer, will be notified and then added to a published prohibitions list, which will be used by local authorities for enforcement. Only a person named on the prohibitions list will be subject to the prohibitions. The regulations also apply the prohibitions to persons controlled by the developer to make sure that developers cannot easily avoid the prohibitions by continuing their development business through other entities they control. Prohibited persons will be subject to a planning prohibition that prevents them carrying out major development in England, except where planning permission is received before these regulations come into effect. Development of land carried out by a prohibited developer in breach of a prohibition will constitute a breach of planning control.

The regulations include provision that developers notify the local planning authority about their status as a prohibited person, or when the prohibitions are lifted. The Joint Committee on Statutory Instruments has reported on the absence of a specific sanction for failure to give notice under these provisions. I would like to reassure the Committee that these regulations are effective without such a sanction. The primary mechanism for identifying prohibited persons will be the prohibitions list published by the Secretary of State, so local planning authorities will have access to all the information they need even if a developer fails to notify them. In addition, any developer that engages in development contrary to the prohibition will as a result be subject to sanctions through planning enforcement.

The regulations also establish a building control prohibition, which prevents prohibited persons gaining initial and final building control approval in respect of any building work that requires such approval. The prohibitions have limited exceptions. The purpose of these exceptions is to mitigate potential impact on innocent third parties such as off-plan buyers, the wider public and certain entities that are not in the building industry.

The building control prohibition is subject to exceptions that seek to protect innocent third-party purchasers of properties from a prohibited developer, including a specific exception to assist those whose deposits could be at risk if a prohibition came into effect after they had exchanged contracts. There are also exceptions to ensure that emergency repairs and other repairs to any occupied building that are necessary for the safety of residents can proceed.

Both prohibitions are subject to exceptions to exclude critical national infrastructure projects and to permit certain entities in developers’ corporate groups that are not in the building industry to have the prohibitions disapplied to them where this would not frustrate the purpose of the scheme.

I know the Committee will also be concerned about other industry actors, particularly construction products manufacturers. It is unacceptable that cladding and insulation manufacturers have not yet acknowledged their responsibility for the legacy of unsafe buildings. Most recently, the Secretary of State has written to three industry participants, Kingspan, Arconic and Saint-Gobain, and to their institutional shareholders, to make it clear that those manufacturers must contribute to the cost of remediation or may face severe consequences. The Government will consider all options to ensure that construction products manufacturers contribute their fair share.

These regulations launch an important scheme for developers to remediate unsafe buildings. Given the urgency of this issue, we are bringing forward these regulations for a scheme focused on larger developers at speed. We propose to extend the scheme over time to cover all developers that have built defective buildings over 11 metres and should be paying to fix them. I commend these draft regulations to the Committee.

[Lord Naseby (Con)]

My Lords, I very much welcome the way my noble friend has introduced these important regulations. My dear late father was an architect so I was brought up in that climate, and I do not think anybody in the industry disputes the fact that those responsible for developing unsafe buildings should remedy the defects at their own cost as quickly as possible. That bit seems to be agreed all round.

However, there are some aspects of the scheme that I hope my noble friend will take on board and that should probably result in some changes. The first is the presumption that anyone who has developed a building above 11 metres has to bear the burden of proof that their buildings are not unsafe. That is a pretty costly execution to be done, plus I wonder whether this self-examination is actually the right way forward. What ought to happen is that a regulator should be employed and report accordingly to the Secretary of State.

Secondly—and this is an important dimension—the regulations impose qualifying criteria for membership that appear to bear no rational relationship with the harm identified. Rather than specifying membership criteria by reference to the number of buildings above 11 metres developed, instead the criteria relate to profitability. The result is that a cowboy developer that has built countless buildings of 11 metres and over unprofitably appears to escape the criteria, but for the responsible developer that has built virtually no buildings above 11 metres, profitability is required to join the scheme, with all the obligations that entails.

Housebuilding

Debate between Baroness Scott of Bybrook and Lord Naseby

Wednesday 7th June 2023 Lords Chamber

[Baroness Scott of Bybrook (Con)]

I am not going to get into what will and will not be in the NPPF at this time. What I can say about government support for SMEs is what we are doing at the moment. We have launched the Levelling Up Home Building Fund, which is providing £1.5 billion in development finance to SMEs and MMC builders and supporting them to deliver more homes. As the noble Baroness said, the Levelling-up and Regeneration Bill will make changes to the planning system that will support SMEs by making the planning process faster and far more predictable.

[Lord Naseby (Con)]

My Lords—

Leasehold Enfranchisement

Debate between Baroness Scott of Bybrook and Lord Naseby

Tuesday 2nd May 2023 Lords Chamber

[Baroness Scott of Bybrook (Con)]

I thank my noble friend for that question. As I say, we are looking at how we can protect it. On whether it is retrospective or not, I will have to write to my noble friend.

[Lord Naseby (Con)]

Is my noble friend aware that the general tenor of the Answer she has given this afternoon is enormously welcome and a demonstration of the statements made in the last 12 months that our Government believe in not only modernising leasehold but the whole structure of the housing market in the United Kingdom?

[Baroness Scott of Bybrook (Con)]

I thank my noble friend for that question—or statement, I think. Yes, we have made it very clear all along, in answering every question that I have been asked at this Dispatch Box, that we are going to bring forward further leasehold reform and it will be in this Parliament.

Housing: Overcrowding

Debate between Baroness Scott of Bybrook and Lord Naseby

Tuesday 25th April 2023 Lords Chamber

[Baroness Scott of Bybrook (Con)]

Obviously the Government are concerned about overcrowded houses around the country and the report that came out, but I can tell noble Lords what the Government are doing. Now, as we sit here, we have an affordable housing fund of £11.5 billion, and we are putting more priority on using that fund for houses for social rent. The £500 million local authority housing fund is also going out now, to build houses in the next two years where local authorities are under extreme pressure for social housing. As I say, for the future, we are changing the NPPF to ensure that social housing takes a higher priority when local planning authorities are looking at their local plans and prioritising houses for social rent.

[Lord Naseby (Con)]

Is it not a fact that, over the last five years, there has been a steady decline in social housing? Against that background, will my noble friend look again at this issue and put some drive behind new towns, new cities and new garden cities? Those organisations have relieved a great deal of overcrowding in our cities throughout the United Kingdom and have provided decent housing for families to live in, for the future.

[Baroness Scott of Bybrook (Con)]

This is a subject that my noble friend brings up quite often. As I have said, we will continue to look at every solution to the problem of more houses in this country.

Leasehold Reform

Debate between Baroness Scott of Bybrook and Lord Naseby

Thursday 23rd March 2023 Lords Chamber

[Baroness Scott of Bybrook (Con)]

The noble Lord brings up a very interesting point. I will take it back to the department and we will discuss it further. These are the sorts of issues that LEASE will be helping potential buyers work their way through.

[Lord Naseby (Con)]

My Lords, since there is a considerable challenge in the housing market, arising partly from Grenfell and the related programme, and there is a shortage of homes at every single level, is this not a case where His Majesty’s Government need to move with speed but also with thoroughness before we take any action?

[Baroness Scott of Bybrook (Con)]

My noble friend is absolutely right. Leaseholder issues are complex and contain a lot of legal issues that need to be dealt with. Therefore, we need to take our time, and we are doing so, but the government manifesto says that we will deal with this issue within this Parliament, and we intend to do so.

Leasehold Charges

Debate between Baroness Scott of Bybrook and Lord Naseby

Monday 20th February 2023 Lords Chamber

[Baroness Scott of Bybrook (Con)]

I thank the noble Lord. I do remember his question and I am sorry I have not checked up on this recently. I will do so and will respond to the noble Lord.

[Lord Naseby (Con)]

My Lords, can we not acknowledge that the debenture issue is not new but has been going on for years? In this section of the housing market, both tenants and landlords do not know their mutual responsibilities. Is it not time for a draft Bill, so that there can be proper detailed discussions and action can be taken for the benefit of both parties?

[Baroness Scott of Bybrook (Con)]

The Government recognise the strength of feeling in this House in particular, and the other place, on the leasehold issue, but it is complex and needs careful consideration. The Government have said that we will bring a Bill forward in this Parliament and that is what we intend to do.

Housing: Private Rented Sector

Debate between Baroness Scott of Bybrook and Lord Naseby

Thursday 12th January 2023 Lords Chamber

[Baroness Scott of Bybrook (Con)]

I am afraid that I have to answer the noble Lord that it is not up to me to agree to a debate, but I am sure that the Front Bench along from me has listened to what the noble Lord said. It would be an interesting debate.

[Lord Naseby (Con)]

My Lords, I recognise my noble friend’s sincerity in her initial Answer. Nevertheless, 95,000 families are living in temporary accommodation. In recent months, we have seen rent rises nationally of 17% and as high as 59% in some boroughs of London. Will my noble friend put some motion and activity behind a proper analysis so that we can produce an urgent way forward?

[Baroness Scott of Bybrook (Con)]

The Government have made it clear that, within this Session, they will bring forward the private renters Bill, which will look at the issues that my noble friend raises, as well as many others. The Government have allocated £654 million in funding this year and next year on homelessness and people in temporary accommodation. Recently, because of those issues that we know are happening, we have topped that up in December by another £50 million. We are doing everything that we can in this difficult time to support these vulnerable people.

Housing: Manifesto Commitment

Debate between Baroness Scott of Bybrook and Lord Naseby

Wednesday 26th October 2022 Lords Chamber

[Lord Naseby (Con)]

My Lords, is this not now a golden opportunity for the new Government to recognise the success of Milton Keynes as a new town/city, Northampton as a new town, and Welwyn Garden City? That concept can be modernised and is an opportunity —to pick up the point made by my noble friend—for social housing to be in the lead? Should not every one of the roofs in these new towns be appropriate for dealing with Covid, et cetera?

[Baroness Scott of Bybrook (Con)]

New towns have been around for many years, and are a part of the solution if local people are happy to have that in their area. I will take my noble friend’s views back to the department; we will discuss it further and I will talk to my noble friend.

Scotland Act 2016 (Social Security) (Consequential Provision) (Miscellaneous Amendment) Regulations 2021

Debate between Baroness Scott of Bybrook and Lord Naseby

Tuesday 22nd June 2021 Grand Committee

[Lord Naseby (Con) [V]]

My Lords, I recognise the antecedents of the Smith commission, itself deriving from the 2014 Scottish independence referendum, and the following Scottish Acts in 2016 and 2018. I am no expert on the details of this particular SI or social security benefits in general, and I do not know if I am right on this, so maybe my noble friend can clarify it when she speaks at the end, but it seems to me that it does not affect social legislation in Great Britain—or, that is, it affects England and Wales but not Northern Ireland.

My key concern is about the background of the importance of the union—we all know what is happening on the ground at the moment—and a recognition of what the current SNP leadership is all about. This in itself is in contrast to the powers of the Scottish Parliament. For example, it has the power to borrow over and beyond the benefits of the Barnett formula, as I understand it, so there is a double incremental benefit to Scotland as a whole.

What will be the impact on the other three nations that make up the United Kingdom? Is this just a simple implementation agreed by all four parties, with Scotland in the lead? They are doing trials in various cities. Or is it what I would call a ratchet effect, in that they take an initiative which the rest of the union then has to follow? I do not know, and I hope my noble friend can make that absolutely clear for the record when she winds up.

I will now focus particularly on Northern Ireland, and colleagues may wonder why. This is primarily because I was PPS in Northern Ireland from 1979 to 1981 and got to know that part of the UK quite well. I have deep concerns about what is happening on the ground there; they are struggling with the protocol and the aftereffects of Brexit on top of everything else. I would have thought that to have an important part of their social security affected as well—seemingly in the autumn—is just another problem and challenge for them.

I have two implementation points to make. I note that this is to be trialled in Dundee City, Perth and Kinross, and maybe somewhere else, from 26 July. It is thought that there will then be a full national rollout in the autumn. But 26 July is, in effect, the beginning of the summer, and nothing very much will happen in August, so we will really begin to have some test of this in September or October. Normally, to do a proper test, you would do it for at least three months. You would then review it for a month, because there are bound to be some elements of it that are not quite right, particularly if you have to consult the other three nations. Maybe they are not going to consult, but they should. I suggest to my noble friend that she should have a quiet word with her colleague across the border and ask if they are absolutely sure that it should be rolled out in the autumn and why it should not be rolled out from January, when people have had time to look at it, make necessary technical amendments and then implement it accordingly.

The other technical matter I would raise is that it is all very well saying that there is a 13-week change in some of the moves from Scotland to England, Wales or wherever. It never ceases to amaze one, having been a Member of Parliament, but there are families who do move around regularly when they change jobs or if something else happens—

[Baroness Scott of Bybrook (Con)]

Lord Naseby, can you hear me?

[Lord Naseby (Con)]

Right, okay, thank you.