Building warrant fees: consultation analysis

2. Part 1 - Building Warrant Fees

Part 1 of the consultation provides an overview of the existing building warrant fees model. It explains the suggested changes to the buildings standards system and the different work streams identified by the Futures Board. Funding is needed to support the proposed changes, and two research projects that reviewed the income and levels of reinvestment from building warrant fees recommended a fee model that could adjust flexibly over a three year period.

This chapter analyses responses to questions that asked whether building warrant fees should be increased, whether a portion of the fees should be used to support a national Hub, whether there was support for auditing and monitoring the use of those fees.

Q1.1 Do you agree building warrant fees should be increased to strengthen the building standards system in Scotland?

Just under two thirds (65%) of all respondents agreed with an increase in fees; 42% agreed strongly, and 23% agreed. All local authority respondents agreed (82% strongly), as did all membership bodies (50% strongly), and a majority of contractors/developers were in favour (56%). Views were more mixed among designers/consultants, with 37% agreeing, 32% neither agreeing nor disagreeing and 32% disagreeing.

Resourcing and capacity concerns

Nine out of ten respondents answered the open element of Q1.1. The most prevalent theme in comments was that many agreed with the proposal as they felt additional fees would be needed to meet resourcing and workload capacity issues. Many respondents noted that local authority verifier teams are currently understaffed, and projects faced waits for approvals. With teams facing new and more challenging building standards, such as Passivhaus standards, respondents felt that a larger workforce would be needed, which could be funded by increased building warrant fees.

“Fees have not increased since 2017. In this time, changes in the Tech. Handbooks have resulted in an increase in the scrutiny of plans, an increase in training requirements, and greater interaction with applicants. The proposed changes through the Futures Board Work Streams will add to this workload which will not be covered by the existing fee structure.” – Local Authority

“Local authorities are understaffed and need to recruit. Delays in warrant approval frequently governs project programs.” – Individual

In Q6, the open question at the end of the consultation, some respondents including local authorities reiterated their overall support for increased fees to better fund the building warrant process. They argued that higher fees were needed to strengthen a system that currently operates at a loss.

“The estimated value of works for building warrants received by the City of Edinburgh Council in 2022/23 was just over £1.2billion. The fees from the building warrants validated during this period was less than 0.5% of this amount i.e. less the £5.2million. There will be very few working in the sector that could work with such low fee percentages as this. For the Building Standards profession to improve and build resilience to better serve our communities and better meet expectations, fees have to be increased.” – Local Authority

Others who were unsure about the proposal noted that even with increased fees there is a shortage in skilled staff with fewer people entering the building standards profession. This concern was reiterated in Q6 by some respondents. One local authority noted that while the consultation focused primarily on funding questions, there also needs to be consideration of the shortage of qualified employees.

Improvement to compliance and verification services

Many respondents agreed with an increase in fees as they thought it would improve the verification, compliance and inspection services provided by local authority building standards teams. This would increase confidence in the system as a few respondents felt services had lacked rigour recently. The benefit of increased fees in ensuring well-functioning compliance and verification services was reiterated by a small number of respondents at Q6.

“There are also additional costs that verifiers have had to absorb such as 3rd party structural and fire engineering checks where a verifier cannot recover the cost - this could go some way to covering these costs allowing more investment in the service.” – Local Authority

“We agree, based on any increase improving the service provided by Local Authority Building Control Departments. On the majority of developments, we are not getting the regular stage inspections for all plots that we’d expect from the Building Control Officers (foundation, drainage, superstructure, completion). Increased fees should deliver improved inspection regimes.” – Organisation

“As a structural engineer and SER Certifier, my current experience of the building standards system in Scotland is that, over the last 5-7 years (and especially following COVID), the verification system has degraded quite significantly.” – Individual

Concerns about funding allocations

Many respondents, several of whom agreed or strongly agreed with the proposal and some who felt neutral, argued that if fees were increased, it would be necessary to ringfence the funding to ensure the additional income generated is directed back to local authority building standards and verifier teams.

“The income we do raise from fees is meant to go back into training and funding [building standards], but instead, the majority goes back into the council’s pot, and we never see the benefits.” – Individual

Two respondents disagreed with the suggested changes, believing the money would not be fed back into the building warrant system.

A few respondents reiterated the importance of ensuring the funding reached the Building Warrants Teams at Q6.

Better service needed

Among those who agreed with or were unsure about the proposal, the caveat that any increase in building warrant fees needs to be accompanied by better service was noted by several. Respondents called for consistency between local authorities where they highlighted service differed, and others asked for a standard minimum service level to be guaranteed when fees are paid.

“Not sure what the clients are getting based on current fees, therefore difficult to agree with increasing fees based on this opinion. Therefore, wouldn’t say there is much value for money for the clients, meaning often they wonder what they get for the application fee. Not all Councils are like this, but some are.” – Organisation

“Quality of service from building control is questionable. Increase in fees needs a tangible improvement in service quality.” – Individual

Some respondents disagreed with the increased fee as they argued that the current building warrant fee structure was excessive, with a small number adding that the high cost of fees yielded poor service. They were unsure how increased fees would improve service.

Critique of the application and verification systems

Several respondents disagreed with the proposal. The most common reason for disagreement was due to poor perceptions of the current building warrant application and verification process. This included critiques of the verification system, specifically outsourcing work to designers to check the work of other designers.

“It is farcical that we have local authorities checking the work of qualified professional designers, who carry [Professional Indemnity] insurance for their work. What is even more farcical is that some local authorities contract this work out, so professional designers are being paid to check the work of professional designers. Indeed, the presence of BW approval is absolutely no mitigation in the event that there is a design flaw. It is an utterly pointless check which carries no weight apart from LA approval processes.” - Organisation

Q 1.2 Do you agree that a proportion of the building warrant fee should be used to support a central Building Standards Hub?

The Building Standards Hub was conceived to support the building standards system with additional resilience and consistency, including enhanced regional partnerships. Currently, a central Building Standards Hub is in a two year pilot phase, hosted by Fife Council.

Overall, 70% of respondents agreed with using a proportion of building warrant fees to support a central Building Standards Hub; 34% strongly agreed, and 36% agreed. A majority of most types of respondents agreed, except for designers/consultants, where 47% agreed to some extent, while 27% disagreed and 26% were neutral.

Over four fifths commented in the open element of Q1.2. Many comments, however, focussed on the perceived benefits of the Hub rather than explicitly explaining why a portion of building warrant fees should be used to fund it. Based on the closed question responses, the implication is that a portion of fees should be used to realise those benefits. A small number reiterated their support for the Hub at Q6. All responses are included in the following analysis.

Improves consistency

The most common theme was agreement that a proportion of the building warrant fee should be used to support a central Building Standards Hub as it would improve nationwide consistency in the verification approach.

“Responses from different local authority verifiers vary significantly both in procedures and specific technical answers across Scotland. It would be beneficial for the industry as a whole to get a central resource that can support the individual verifiers to provide consistent quality advice and responses.” – Individual

Most respondents making this point did not elaborate. However, those who did commented that different local authority areas apply the standards differently, which can make submissions more difficult and take longer to get approval. Respondents suggested a coordinated approach would be appreciated.

“We strongly agree that a proportion of the building warrant fee should be used to support a central Building Standards Hub. Establishing a central Building Standards Hub addresses a pivotal recommendation from the post-Grenfell Tower fire reviews. Such a hub promises to streamline and centralise expertise, guidance, and resources, thus facilitating consistent and high-quality building standards across Scotland. With 32 local authority verifiers, a central hub can act as a hub for best practices, research, and continual upskilling.” - Organisation

It was also suggested that, by being a consolidated body, a Building Standards Hub could efficiently address challenges, harness technological advancements, and provide timely responses to evolving building requirements. Given the complexities and rapid advances in construction methods, materials, and technologies, it was felt that the industry could benefits from having a focal point to turn to for advice, training, and direction.

Alternative funding sources

Several respondents who agreed with the proposal and some who disagreed or were neutral suggested different funding sources for the Hub. It was frequently suggested that the Scottish Government should provide at least some funding.

“The Hub will primarily be supporting verifiers so they should contribute towards the costs. Much of the work taken on by the Hub from LABSS could be argued as being within the BSD remit and therefore funding should also come from central government.” – Local Authority

Some contractors/developers felt the additional fees already paid via the Scottish Type Approval Scheme (STAS) should be recognised. As this benefits the verifiers and the application process, some suggested there should be a building warrant fee discount.

“Developers do, however, currently pay additional fees to STAS for their house range 'TYPE' approvals. [We] believe that any increase in building warrant fees should recognise the benefits to Local Authority verifiers of TYPE approval, and that developers that have this in place should be granted a discount to each site-specific Warrant Application.” – Organisation

While they agreed with the proposal, one local authority provided specific recommendations on how the money should be allocated, including regular reviews about any changes to the budget or staffing of the Hub and ringfencing fees to pay for verifier positions and not general Hub overheads.

Another local authority stated that the Hub should be funded proportionately between local authority areas based on profits from fee incomes and the volume of applications received.

Improves training and access to information

Improved access to training and information via the Hub was mentioned by several as a reason they agreed with the proposal. These respondents noted that the Hub would allow for shared experience across local authorities and allow verifiers to seek expert input on more complex applications. The benefit to smaller councils that may have less staff and experience was mentioned by a local authority.

“Being able to draw on specialist knowledge is extremely important to smaller Local Authorities, who often have to rely upon expensive third-party specialists. Providing training, in a standardised way, to increase the professionalism of staff across Scotland should also be supported. Any financing by Local Authorities would need to be proportionate to the fee income and be financed by part of the fee increase.” – Local Authority

Improved efficiency

Improvements to the efficiency of the verification process were mentioned by several. Some thought the Hub would improve workload and capacity issues which have created a backlog in the system. Others described the benefits that greater digital streamlining would have to the way the process works.

Reasons for disagreement

Several respondents disagreed that a portion of building warrant fees should go toward funding the Hub. The reasons for their disagreement, in order of prevalence, were:

• Concerns about the funding allocation, specifically that a £1 million budget for the Building Standards Hub is too high for the service being offered.
• A small number argued that building warrant fees are already too high and disagreed with a further increase.
• Two respondents suggested that more control should be given to local authorities on how to use building warrant fees.
• There was a dislike of the move toward centralisation, which two respondents thought reduced the quality of service.
• Two respondents disagreed with the proposal but did not provide further details.

“£1m per annum is a crazy annual budget for a process of centralising elements of building control for all 32 local authorities. The pilot seems have the purpose of trying to establish what services a centralised HUB could provide? Surely that is the cart before the horse... the services should have been identified and the pilot should have been to trial the process.” - Organisation

General agreement

There was general agreement with the proposal from some participants who noted that the Hub must be funded, and a share of the building warrant fees would be an appropriate source of those funds.

Requests for further clarification

Some respondents asked for further information about the Building Standards Hub and what it would offer before feeling able to comment on the question. A local authority agreed with the proposal but asked for more detail about the percentage of each local authority’s fees that would be directed to the Hub.

Q1.3 Do you support the introduction of enhanced verification and certification auditing, monitoring and reporting of fee investment to support the implementation of the strengthened building standards system over the next 3 years?

Overall, three fifths (62%) supported the proposal, one in ten (9%) were opposed, and one quarter (27%) were unsure. Levels of support varied considerably by type of respondent. Individuals were less supportive than organisations (41% and 77% respectively). Among organisations, support ranged from all membership bodies and 86% of local authorities to 67% of contractors/developers and 42% of designers/consultants. However, where support was lower, this was due to respondents being unsure rather than opposed.

General agreement with the proposal

Of the two thirds who commented in Q1.3, there were two common themes, each mentioned by several respondents. The first was general support for introducing enhanced verification and certification auditing, monitoring, and reporting of the fee investment over the next three years. Respondents felt that transparency was important, especially with publicly generated fee incomes, and that the steps outlined in the consultation paper were essential to ensure continued service improvement.

“It is only right that the use of publicly generated income is monitored and checked, especially in this case given past evidence of non-allocations, to ensure the correct allocation of funds to building standards frontline services.” – Individual

Concerns about workload, capacity, and resourcing

Another equally common theme was concern about the workload, capacity and resourcing of local authority building warrant staff. Respondents expressed concerns that there are insufficient trained staff to support the proposed changes, regardless of increased investment. A few noted staff are currently overworked, negatively impacting performance standards.

“Staffing issues and work morale within the sector impact on building standards performance. The existing building standards professional duties already cover a wide aspect of job roles and should be recognised for its skill set. Due to the current requirement to meet [Key Performance Indicators] and the existing [Construction Compliance and Notification Plan], it is unclear how the Scottish Government are proposing to add additional workload onto an already strained building standards profession?” – Individual

Others emphasised that while they supported the proposal, undertaking further auditing could be an additional burden placed on staff and heightening capacity strains.

“Verifiers should be subject to auditing and monitoring, so long as this does not result in a continual large use of resource for the verifier to meet the audit requirements.” – Local Authority

“The burden of additional data collection is something that should be considered carefully as sometimes it takes significant time to produce the data required and takes away from the day-to-day job.” – Local Authority

Requests for further clarification

Some respondents, a mix of individuals, contractors/developers and local authorities, requested further details about the proposal before they could provide a definitive view.

Support for continued auditing after the three years

The need for indefinite auditing and monitoring was highlighted by some contractors/developers, who suggested it would maintain a high level of service.

“[We] suggest that any enhancements in audits, monitoring and reporting should not stop after 3 years, and should be part of the provision of a high-quality service.” – Organisation

Transparency over funding allocation

Some respondents agreed with the proposal as they felt the auditing and monitoring would provide reassurance that the fee reached the local authority building standards teams and would be ringfenced to reinvest in and support those teams.

“It is important that fee income through the building standards system is monitored and reported to ensure that is being correctly invested in building standards services.” – Local Authority

Data publicly accessible

Data transparency was mentioned by some organisations. Contractors/developers and membership bodies were interested in accessing the data to ensure fee funds were being used correctly. In contrast, local authority responses focused on using transparent data to prove to Scottish Ministers and the public that the fees were being used as claimed.

“The introduction of enhanced monitoring/reporting would assist building standards services as the auditing of the fee investment will require to demonstrate and validate to Ministers that this is in practice being used to support and strengthen the system rather than being redirected elsewhere within the authority.” – Local Authority

Reasons for disagreement

Some respondents disagreed with the proposal. A few individuals believed the current system functioned adequately and there was no need for change, while a few others argued that increasing fees would make building work too costly. One individual noted that the process was already bureaucratic and thought adding more consultation and expert reports would make building warrant approval even more challenging to obtain.

Other suggestions

The following suggestions were each mentioned by one respondent:

• Building Standards Division is using the wrong Key Performance Indicators, and that: “it may be beneficial if records were kept of the points being raised through the verification process which stops non-compliance by unsuitable applications”.
• Inflation in the building sector will increase fee generation regardless of the fee change.
• One organisation supported the proposal as a way of futureproofing and “ensuring building standards systems remain agile and responsive”.
• Another organisation suggested a different audit method by using an ‘approved designers’ list, with members on the list subject to annual audits. If they pass the audit, their building warrant fees are reduced.

Q1.4 Do you agree that, before any planned increases or adjustments to building warrant fees in the second and third year, progress should be reviewed against suitable criteria towards the planned outcomes?

There was widespread support for this proposal, with 81% of all respondents in favour, including 72% of individuals and 88% of organisations. While support was lower among individuals, this group tended to be unsure (21%) rather than opposed (8%).

General agreement with the proposal

The most common theme among the almost three quarters of respondents who commented in Q1.4 was agreement with the proposal. Many respondents agreed with the approach but did not elaborate on why.

Several respondents agreed due to the increased transparency it could provide over the use of building warrant fees. Respondents highlighted the importance of accountability in the process, and some mentioned that reviews would allow for an examination of how efficiently the system is running and how consistently the standards are applied.

“Regular reviews promote accountability and transparency. Stakeholders, including those in the construction sector and plumbing and heating profession, need assurance that financial contributions lead to the desired improvements in the building standards system. By reviewing progress, the industry can ensure that funds are allocated efficiently and that the intended initiatives are progressing as envisioned.” - Organisation

“I want to see project reviews to reveal whether the standards are being applied thoughtfully and consistently to projects.” - Individual

Ensuring positive impact

Ensuring the increased fees positively impact the building warrant process was mentioned by several individuals and organisations. Respondents noted that reviewing the increased fees after 12 months would show whether those increases were linked to tangible improvements in the application and approval processes. Respondents believed that was necessary before committing to increased fees over three years.

“It would need to be established that the fee increases are being used for the intended purposes and are achieving the intended results. This should be done prior to further increases. Clarification would need to be given on what criteria progress would be reviewed against.” – Local Authority

Timescales

Several respondents, primarily local authorities, agreed with the proposal but disagreed with the timeline, suggesting 12 months was not enough time to allow local authorities to make the changes necessary to improve services. These changes included hiring and training more staff, which may take longer than a year to affect change.

“For the intended improvements noted in 1.1 above to be delivered it is key that incomes are correctly invested as intended at the front line. However, the ongoing workforce shortages, pressures to make savings across the board and the slow uptake on the MA course will not have been turned around in this 2–3-year period. There is a risk that this short time scale may prove difficult to achieve in this climate and, in some circumstances, may lead to a service failure. [We] believe that a more realistic extended timescale would lead to a more achievable outcome whilst at the same time allowing for suitable scrutiny of investment criteria.” – Local Authority

Clear, achievable criteria

The importance of the criteria used to judge and measure improvement over the 12 months was mentioned by some individuals and organisations. Respondents noted that the assessment after the first year should be based on clearly defined criteria, which will provide evidence of change over time. A local authority noted the importance of defined criteria to ensure stakeholders and customers have realistic expectations about what changes can be expected from increased fees.

“Regularly reviewing progress against established criteria will allow for the effective evaluation of outcomes and the identification of any necessary adjustments or refinements to the plan. It promotes transparency and accountability, ultimately benefiting all stakeholders involved in the building standards system in Scotland. We support this proactive and responsible approach to fee adjustments.” – Local Authority

Less commonly mentioned themes

A small number mentioned the following themes in order of prevalence:

• A few requested greater clarity on what would be included in the criteria.
• Comments related to the fee increases were mentioned by a few. These included suggestions that fees should be applied on a sliding scale and gauged against the number of building warrant applications. An organisation suggested that “any upgrades needed for the industry should be borne partially by the industries.”
• Two disagreed with the proposal but did not provide further information.