Cornerstone: Improving quality – is licensing the answer?

A new Construction Licensing Task Force has begun to develop a mandatory licensing scheme for UK construction companies.

The scheme’s principle aim will be to transform the construction industry’s failing reputation, as highlighted by damning statistics published last year in a report by The Federation of Master Builders (FMB). The FMB found that:

• one in three homeowners are put off doing major improvement works requiring professionals – because they fear hiring a dodgy builder
• 55% of those who commissioned home improvement works had a negative experience with their builder
• nine in ten believe the Government should criminalise rogue and incompetent builders; and
• 78% want to see a licensing scheme introduced.

The FMB also calculated that homeowner distrust means the industry is missing out on over £10bn of business per year.

Liz Peace, the former Chief Executive of the British Property Federation, will chair the Task Force. She expressed confidence in the scheme being supported by industry leaders:

“Licensing has support in principle from more than 30 construction organisations and consumer groups. The Task Force will be supported by major players and in an industry that is often criticised for being too fractured and disparate, I am heartened by the fact that the sector is coming together to lead the industry in a new direction.”

Peace hopes that the licensing scheme will transform the UK industry into a world leading sector, helping “drive up standards and (…) address the issue of quality and professionalism, which is some areas, is falling short”.

Various industry groups will be members of the Task Force as it explores options. These include the British Property Federation, the CIOB, the RICS, and various industry specific federations.

The UK’s construction industry has arguably had a laissez faire approach to licensing in comparison to its European neighbours and Commonwealth cousins. As Brian Berry, chief executive at FMB alluded, “in countries like Australia and Germany, building firms require a licence…we want to develop a scheme that regulates our industry in a similar manner.”

So while the scheme may be ground-breaking in the UK, established licencing regimes are already in place in jurisdictions such as Japan, Russia and the United Arab Emirates.

However, few details on the new licensing Task Force have been announced – although that’s perhaps not surprising when its existence was only confirmed on 12 June 2019. It has not been announced if any resulting licensing scheme will be enforced by law, or become (another) industry badge scheme saturating an already confusingly regulated market.

The scheme is in its early stages, but could permanently change the way the construction industry is regulated if it emerges that the scheme is legally binding. The UK construction industry will wait with great interest for further detail on the nature of this new mandatory licencing scheme.