The Building (Fees) (Scotland) Amendment Regulations 2025: business and regulatory impact assessment

Full Business and Regulatory Impact Assessment – November 2024

1. Title of Proposal

The Building (Fees) (Scotland) Amendment Regulations 2025.

2. Purpose and intended effect

This policy will increase building warrant fees from 1 April 2025, as part of a three year model to increase fees annually, providing additional resources to local authority verifiers to facilitate changes to improve and strengthen the building standards system in Scotland.

The proposed increase will allow local authorities verifiers to reinvest fees to support their building standards verification service to strengthen compliance through increasing numbers of staff at appropriate levels or investing in technology and training. The work of the Futures Board Programme is bringing forward changes to improve the building standards system that requires verifiers to resource appropriately. This will provide a more consistent service for customers and businesses across Scotland, increase the number of inspections and checks carried out ensuring safe and compliant buildings, support the Scottish Building Standards Hub (SBSH) and allow for the introduction of an enhanced compliance plan to strengthen the system.

3. Background information and objectives

Following the fire at Grenfell Tower in 2017 and the construction failings of Edinburgh School buildings, a Ministerial Working Group was set up to review building and fire safety regulatory frameworks. The Group commissioned two Expert Review panels; Compliance and Enforcement and Fire Safety that subsequently published their own recommendations. The Building Standards Futures Board was set up at the beginning of 2019 to provide guidance and direction on the development and implementation of the recommendations made by the Review Panels. The Verification Delivery Model was identified as an area that required strengthening, resulting in the formation of the Verification Delivery Model Working Group (DMWG) that oversees the Verification Delivery Model workstream.

Building warrant fees were increased on 1 April 2024. This was the first increase since 2017 and the first in the 3 -year model designed to increase building warrant fees annually. A proportion of the increase was used to fund the Scottish Building Standards Hub (SBSH) officially launched in September 2024. The SBSH is one of the outcomes of the work taken forward by the Verification Delivery Model workstream as well as a recommendation of the Expert Review Panels. The SBSH strengthens the system by providing support and assistance to all 32 local authorities and the wider construction industry by providing access to expertise and specialist advice in fire engineering solutions, fire safety, structural engineering and energy and environmental engineering. It also provides 32 verifiers access to learning and development opportunities and promotes the growth of workforce through universities, colleges and Apprenticeship programmes. The SBSH also undertakes a number of other building standards core duties such as the administration of the Scottish Type Approval Scheme (STAS), Dispute Resolution and Information Papers.

Two research projects completed by Optimal Economics reviewed the income and expenditure of building warrant fees across Scotland and developed a three year fees model. The fee model’s aim is to increase fee rates to enable investment in local authority verifier teams required to support increases in workload to deliver an increase in compliance to strengthen the building standards system being introduced by the Futures Board Programme. The model uses local authority data over a 5 year period such as the number, type and cost of applications and provides the ability to change a number of key assumptions, allowing the model to deliver the anticipated funding for the building standards system between 2024-25 and 2026-27.

A public consultation held in 2023 sought views and opinions on increasing building warrant fees to strengthen the system. Additional questions were asked around monitoring and reporting of fees and if fees should be set nationally and locally. The outcome of the consultation demonstrated support for an increase in building warrant fees. As a result, Building warrant fees in Scotland were increased on 1 April 2024 through the Building (Fees) (Scotland) Amendment Regulations 2024, the first year as part of a three year model to increase fees annually.

The objective of this policy is to increase building warrant fees in year 2 of the three year model. This modelling includes an inflation uplift as noted from the Cost Building Index (CBI) from 2022-23.