Higher-Risk Buildings and the Building Safety Act – one year on

Now that a year has passed since the end of the transitional period, we look at how the implementation of the Building Safety Act’s new gateway regime for projects across England has impacted the market. In particular, we examine the practicalities for the market, and discuss those elements of the BSA which are still to be implemented.

Delay, delay and…more delay

One of the key considerations when working on a Higher-Risk Building (HRB) is ensuring the project proceeds swiftly through the relevant gateways. Under the BSA it was expected that the Building Safety Regulator (BSR) would have a statutory period of 8-12 weeks to review and approve each gateway application, but to date more than two thirds of applications submitted in Autumn last year remain unapproved.

The Government, once it became aware of the resourcing issue within the BSR, subsequently provided them a target date of April 2025 to clear the backlog of gateway 2 applications – but this again appears to have been missed. The BSR has further tried to overcome this issue by setting a stricter standard as to what qualifies as a properly submitted application, either through a meticulous punctuation and grammar check or by limiting the types of application it will review. For example, phased applications appear to be being reviewed on an exceptions basis rather than as a given.

In some cases the approval delay is in excess of 30 weeks from the date of submission of the relevant application. This backlog is in turn having a knock-on effect for contractors and developers alike, as without gateway 2 approval, it is increasingly difficult to secure supply chains early on and – most importantly – it is more difficult to secure third party funding as many institutional funders are pulling away from HRB projects until this issue is resolved.

The hope is that the BSR will be more confident and resourced for the influx of gateway 3 applications expected in the coming months and years, but this is yet to be seen on a significant scale. The BSR recently confirmed of the ten gateway 3 applications received so far, only one had passed, so it appears there is a lot of room for improvement on all parts before the influx.

The death of Design and Build

There has been a lot of debate in the market as to whether the changes implemented by the BSA have resulted in the ‘death’ of the true design and build (D&B) contract that many know and love.

Developers will see that many contractors are no longer happy with a rough set of drawings and taking the sole risk in the development of that design. Instead, they are advocating for key responsibility matrixes alongside the novation of more members of the developer’s design team before they will agree to sign. Further, many developers are now taking a more cautious approach to a project’s design given they remain the key responsible party in the event of any breach and are appointing more professionals to not only design but to oversee the design development through to completion.

However, while the D&B may be evolving, it has not been made entirely redundant by the new regime. It is important that the engagement, cooperation and coordination of the contractor with the developer’s professional team happens earlier than it would normally under a D&B, and that the design be taken further than it usually would have been than schemes pre-BSA, but overall the D&B remains alive and kicking.

We have also seen an increase in PCSAs being utilised to manage this early design engagement for the contractor, as well as notice to proceed mechanisms within the contracts themselves, so that the design can be carried out more extensively before the gateway 2 application made and shovel takes to ground.

What is to come

Alongside the evolution of those elements already in place under the BSA, there are other elements that are still due to hit the market fully.

One of the key changes due to come in within the next year, is the Product Safety Regulator (PSR) which will be a key body responsible for conducting market surveillance and reviewing complaints so as to assess the safety of products. The PSR will be an arm of the Health and Safety Executive much like the BSR, so time will tell as to whether they will experience the same resourcing and other practicalities faced by the BSR and what the government can do to assist with this.

The market is also due to see home warranty providers offering packages that extend the usual 10 year cover to 15 years. We have not yet seen any insurance backed warranty provider operating any 15 year product as of yet, but understand that these are to be released within the next few months. We look forward to receiving details of these in due course and how the phasing of obligations under these policies are intended to operate for end users of new homes.

Finally, the government recently released a consultation response in connection with the proposed building safety levy to be applied to HRBs. There have been some concerns around the levy such as it resulting in a reduction in the number of affordable housing units on schemes, which would in turn impact disadvantaged and/or protected groups, but this does not appear to be substantiated just yet. While this consultation had a low response rate overall with just 5 developers, 17 local authorities and 5 undisclosed responders, the proposed levy will still need to be debated through Parliament before we see any real movement on this proposal.

As it has always been, the BSA represents a learning curve for all – developers, contractors, lawyers and the regulator are all, to that extent, in the same boat. We will continue to update on developments as we see them, but in the meantime please get in touch if you have any BSA queries.