COMMITTEE FOR FINANCE AND PERSONNEL

OFFICIAL REPORT

(Hansard)

Response to the Committee Report on Building Regulations (Amendment) Bill — Department of Finance and Personnel Briefing

10 September 2008

Members present for all or part of the proceedings:
Mr Mitchel McLaughlin (Chairperson)
Mr Roy Beggs
Dr Stephen Farry
Mr Simon Hamilton
Mr Fra McCann
Ms Jennifer McCann
Mr Adrian McQuillan
Mr Ian Paisley Jnr
Ms Dawn Purvis
Mr Peter Weir

Witnesses:
Ms Hilda Hagan )
Mr Seamus McCrystal ) Department of Finance and Personnel
Mr Gerry McKibbin )

The Chairperson (Mr McLaughlin):
I refer members to the briefing paper from the Department of Finance and Personnel (DFP), which was received too late to be included in members’ papers in advance of the meeting. I remind those present that Hansard is recording the meeting and, therefore, mobile phones must be switched off.

I welcome officials from the Department of Finance and Personnel, all of whom have been here before: Seamus McCrystal is the head of the building standards branch; Hilda Hagan is from the properties division; and Gerry McKibbin is from the building regulations branch. I hope that you all had a good break over the summer, but now it is back to porridge.

Not having received the papers in time means that members are not as au fait with the issues as would be ideal. That is an unfortunate situation, and it is one that I hope will not happen too often.

For members’ information, and as an aide-memoire, the Committee’s support staff will send round a copy of the recommendations. Will you make some introductory comments, Seamus?

Mr Seamus McCrystal (Department of Finance and Personnel):

Would it be useful for me to go through the points that have been made in the conclusions and recommendations of the Committee’s report and then summarise the Minister’s letter of response?

The Chairperson:
Yes, that would be helpful. From what I have seen, the Minister’s response is mainly positive, so perhaps you would give the Committee a quick overview.

Mr McCrystal:
The Minister’s letter to the Committee is dated 8 September 2008, and I apologise for the Committee’s late receipt of it. I will go through the key conclusions and recommendations of the report and follow that by examining the Minister’s response.

Points 1 and 2 of the Committee’s key conclusions and recommendations record its overall observations on the content of the Bill, with particular reference to clause 1, which facilitates any future decision to introduce a requirement in the building regulations for a percentage of the energy that is used in a building to be derived from low- or zero-carbon (LZC) systems. I do not think that that requires a response at this point, because a later section in the Committee’s recommendations deals with low- and zero- carbon systems.

Points 3 and 4 deal with protected buildings. In his letter, the Minister agreed to the Committee’s recommendation that clause 2 of the Bill be strengthened to require district councils to “take account of”, rather than “have regard to”, the character of protected buildings. He also agreed that:

“officials will consider how buildings not covered by the definition of ‘protected buildings’ might be addressed in guidance issued to district councils”.

Work on that has yet to take place.

Should I continue?

The Chairperson:
Yes, and I will then open up the discussion to members.

Mr McCrystal:
At point 5, the Committee recommends that, where possible, the code for sustainable homes be used to inform the forthcoming guidance documents pertaining to domestic property. The Minister noted:

“the standards in the Code are a precursor for the future of building regulations requirements. Building regulations set the minimum standards to be achieved, whereas the Code’s minimum standard will always be set above the Building Regulations requirements.”

He continues that, as indicated in the code:

“As the Building Regulations requirements are enhanced, the standards in the Code will also be raised.

In point 6 of the key conclusions and recommendations, the Committee accepts the Department’s position that it could not take on additional powers with regard to type approvals without affecting the Department’s role in determining appeals against council decisions on type approval. The Committee concluded, however, that legislative or legal intervention may be necessary if the proposed voluntary arrangement among councils fails to achieve consistency of approach. The Minister has advised that officials will, through regular meetings with building control, monitor progress on that voluntary arrangement and that any necessary legislative intervention may fall to another Department.

In point 7, the Committee accepts the Department’s proposed amendments to the Bill. Those will retain the provisions of article 20 of the principal Order, which relate to civil liability for a breach of duty imposed by building regulations. The Committee is also content with the consequential amendments to clause 16 and its commencement and with the amendments to the schedule of repeals. No further response on that is needed.

In points 8 and 9, the Committee calls on the Department to establish formal protocols covering both publication of the basis-for-appeals decisions and the turnaround time for such decisions. The Committee also recommended that the present appeals mechanism be reviewed at a later date to assess its effectiveness in the context of the change from the deemed-to-satisfy to guidance-based documents once that has bedded down. In response to the Committee’s calls, guidance in satisfying Part R — which is the part that deals with access and use of the building and which has figured most prominently in appeals that we have received in the past 12 months — has been prepared. It has been discussed with building control, and it is now published on our website. The basis of appeals decisions is explained much more fully to the appellant, the relevant building control manager, and the chief officer. A turnaround target for 2008-09 has been included in our business plan. The Minister has accepted that the present appeals mechanism will be reviewed as recommended by the Committee once the guidance-based system has had an opportunity to bed down.

Point 10 states that the Committee expressed concern that individual houses in multi-house applications could be built to out-of-date standards and asks that the necessary subordinate legislation to close that loophole be introduced at the earliest possible opportunity. The Minister has advised that, as requested by the Committee, in the work that will be undertaken to the Building Regulations ( Northern Ireland) 2000 in order to introduce a guidance-based system, it will be proposed that additional regulations be introduced to reduce the time between the approval of plans and the commencement of work on individual houses.

In point 11, the Committee noted that the Department has agreed to facilitate discussion with building control to examine how best to address the outdated legislation on dangerous places and buildings. The Committee recommended that that review be given priority. The Minister has accepted the Committee’s recommendations, including consideration as to which Department is best placed to proceed with that work. At the previous meeting that we held with building control managers, we discussed all the conclusions and key recommendations of the report. We will meet again with building control next week, and the issue of dangerous places will be on the agenda. We will discuss with building control how best to proceed with that.

Point 12 sees the Committee encouraging the Department to examine the scope for establishing more formal North/South and east-west arrangements for co-ordinating policy and legislation on building regulations where appropriate. The Minister indicated that, in his view, existing arrangements work well, but discussions have taken place recently with our colleagues in the neighbouring jurisdictions about meeting to talk about matters of mutual interest with respect to building regulations. Dates have not yet been finalised, but we have agreed that the first of those meetings will take place in November.

In point 13, although the Committee accepted that current building regulations apply to only a small percentage of the total building stock, it believes that continued focus should be placed on identifying additional measures that are aimed at reducing the carbon footprint of existing buildings. In his response, the Minister identified that the Committee will appreciate that, as with other legislation, applying the building regulations retrospectively would be extremely onerous. Any encouragement to improve the carbon footprint of existing buildings would probably fall to other Departments and agencies that have a remit. The Minister highlighted that the last amendment to Part F of the building regulations, ‘Conservation of fuel and power’, which came into operation in November 2006, introduced for the first time requirements that, in certain instances, cost-effective consequential improvements to the thermal fabric of an existing building had to be considered where an extension of — or a significant adaptation to — such a building was being undertaken. There will be an ongoing review of an extension of that requirement.

The Minister also noted that, with the significant rises in energy prices, cost-effective improvements that have been recommended in reports that accompany energy performance certificates (EPCs) are more likely to be carried out and that the overall efficiency of the existing building stock should improve as a result.

From point 14 onwards, the Committee’s report steers away from reference to the Bill and begins to discuss other matters. Shall I continue to respond to the report point by point?

The Chairperson:
That would be useful, because I cannot anticipate the priority that the Committee has given to the remaining sections of the report, so, if you do not mind, I would like you to continue with a point-by-point response.

Mr McCrystal:
I do not mind doing that. In point 14 of the report, the Committee welcomed the introduction of regulations that require energy performance certificates. The Committee sought assurances that all necessary preparations had been made prior to the introduction of the requirements, that appropriate steps are being taken to raise public awareness, and to assure the availability of trained and accredited energy assessors. The Department was responsible for issuing those regulations, and one of my colleagues will now give you an update of the work that has been carried out to publicise the requirements of the regulations.

Mr Gerry McKibbin (Department of Finance and Personnel):
The first phase of The Energy Performance of Buildings (Certificates and Inspections) Regulations ( Northern Ireland) 2008 came into effect on 30 June, around the time that the Assembly began its recess. Prior to that date, several public seminars were held around Northern Ireland — a total of eight were held before the end of June — and further seminars will be held next week in the Balmoral Hotel in Belfast. Those will take place over two days. On Tuesday 16 September there will be a seminar on display energy certificates, which are required by the public sector. That seminar will target energy managers and premises officers in the public sector. On 17 September, there will be an additional energy performance certificate seminar. So far there has been quite a good response on registrations for those seminars.

At the seminars that took place before phase one of the regulations came into operation, it was announced to those present that officials from the Department would make themselves available to speak to the members of any professional organisation or body that requested such a provision. Several organisations took us up on that offer, and departmental officials have given a number of presentations to organisations such as the Construction Employers’ Federation, the Royal Institution of Chartered Surveyors, the Law Society, some solicitors’ firms such as Carson and McDowell, and property management companies, such as Johnston Houston. Officials are also meeting with landlord associations. In total, it is estimated that departmental officials have spoken to around 1,400 or 1,500 people in preparation for the introduction of the regulations.

As well as the public seminars, the Department conducted a media campaign and placed advertisements and notices in the press in the run-up to 30 June. That process will be repeated for the next phase, which extends the regulations to all newbuild and comes into effect at the end of this month. For that phase, the media campaign will target the professional magazines that are aimed at the construction industry. A similar campaign will be conducted in the days and weeks before the beginning of phase three, which comes into effect at the end of December.

The accreditation schemes that operate in England and Wales have been appointed to operate in Northern Ireland as well. Departmental officials are in daily contact with the keepers of the register, Landmark, to ensure that the register is ready for the introduction of phase two at the end of the month. We are satisfied that it should be ready, unforeseen technical glitches notwithstanding.

A dedicated website has been set up at www.epb.dfpni.gov.uk. That contains frequently asked questions and lots of background information on the regulations themselves, as well as information and guidance on how to appoint an assessor to carry out the energy assessment and provide an EPC.

On 11 August a mailshot was sent to over 400 estate agents in Northern Ireland, bringing them up to date with the introduction of EPCs and advising them that, although they do not have a statutory duty under the regulations to make sure that their clients — the vendors — are aware of the requirements, they have a professional duty to do so. This week — and last week — officials from the Department visited several of those estate agents and met with them face to face to advise them. Those meetings were, basically, two-way information sessions that were aimed at getting information from the estate agents about what it has been like on the coalface and to provide them with information on progress that has been made since they received the letter.

The Department has also produced a tri-fold leaflet, and it intends to send approximately 75,000 of those around the various estate agents so that they can pass them on to the vendors. That leaflet provides a background to the introduction of EPCs, explains what is required, the process of getting an EPC, how to get an assessor, the penalties for not having an EPC, and some information about the websites and other available information. I have some samples of that leaflet, which I will now pass to Committee members.

Additionally, we have completed work on several guidance documents, which are available on DFP’s website. They offer guidance on EPCs for domestic and non-domestic buildings, the regulations, and the EPCs’ requirements for air conditioning systems and display energy certificates (DECs) for domestic and non-domestic buildings.

We have very few printed copies of those with us, but the documents are available on our website.

To date, that is the work that we have done to publicise the regulations.

The Chairperson:
Members might want to pursue those points to see how the scheme is implemented. Seamus, do you have any further comments to make?

Mr McCrystal:
Yes, but not on EPCs. I wish to continue discussing the related issues that are outlined in the Committee’s report. Point 15 states that the Committee looks forward to examining the outcome of the consultation on green rebates. No doubt officials from another business area in the Department will present evidence to the Committee in due course, so I have nothing further to add to that point.

Point 16 states that the Committee calls on the Minister to review the basis for the building regulations function that falls to DFP and to consider the case for the transfer of that function to the Department of the Environment, possibly with other related functions. In his letter, the Minister indicated that it may be appropriate to await implementation of the review of public administration before changing the present distribution of functions. He also indicated that such a decision will be for the Executive as a whole to consider.

The other points that have been raised relate to the reduction of carbon emissions in new buildings, microgeneration and low- and zero-carbon systems.

Under point 17, the Committee recommended that the Minister establish 2016 as a firm target for newbuilds in Northern Ireland to be zero carbon, thereby keeping pace with developments in GB and the Republic of Ireland. The Minister has indicated that in the near future he will announce that officials are to work with others in Great Britain and the Republic of Ireland to introduce an amendment that will bring the regulations to the same standard and under the same timescale as has been established for England, Wales and Scotland.

We will assess regularly the cost effectiveness of LZC systems, especially in light of this morning’s publicity about the planned rise in energy costs. We will have to pay attention to that issue. As we have told the Committee before, we will amend the part of the building regulations that relates to conservation fuel and power in 2010, 2013 and, I hope, soon to be announced by the Minister, 2016. Bearing in mind the changes that we will make in 2010 and 2013, at this stage we still propose to work on the basis of identifying a target carbon dioxide emissions rate, but it is obvious that the installation of low and zero-carbon systems will be required in order for developers to meet the targets, which will be quite onerous.

We mentioned energy performance certificates, and the Committee might want to know that the average dwelling rating on those certificates for existing housing stock is about 51 points out of a scale of 100, whereas a newbuild house would score in the region of 80 points. Therefore, there is a significant difference between an average house and a newbuild. That shows that newbuild housing is built to quite a high standard. Therefore, any changes to emissions targets will be onerous.

That summarises the responses that we wished to give to the Committee. I am happy to answer your questions.

The Chairperson:
Thank you, Seamus. You had to gallop through your presentation, but I must say that you did very well.

Mr Weir:
Thank you for your presentation; it was very useful.

You mentioned that one of the amendments on character-protected buildings was to change the wording from “have regard to” to “take account of”. I understand how that appears to be stronger language. Did you receive any particular legislative advice about the practical effects of the change of that wording?

Ms Hilda Hagan (Department of Finance and Personnel):
Several months ago, when I first gave evidence to the Committee, the Office of Legislative Counsel advised that to say “take account of” was only slightly stronger than to say “have regard to”. However, it said that the wording should not be any stronger because one council cannot be compelled to comply with a decision made by another.

It is about perception: it is not easy to identify specifically how much firmer that language is — “take account of” just seems to be a firmer and therefore a tighter requirement. “Have regard to” could be interpreted as meaning that they have had regard to the issue but that they are not going to do anything about it, but “take account of” implies that they have to account for what they have done. That is the basic explanation, but the semantics of the language could be argued.

The Chairperson:
Has that language ever been tested, even in a different context?

Ms Hagan:
I am not aware that it has, but given that it was the Office of Legislative Counsel that advised me that that language was slightly stronger, I can only assume that —

The Chairperson:
In fairness, you explained that previously.

Ms Hagan:
That organisation may be aware of other pieces of primary legislation in which that particular phrasing is used; I am not.

Mr McCrystal:
Where protected buildings are concerned, building control already works within written guidance. That means that what we will now have in legislation will be an advancement on that and an encouragement for building control to follow that guidance.

The Chairperson:
I suppose that we are just anticipating problems — which is perhaps not a bad thing — but we should not get preoccupied until we are confronted with a difficulty.

Mr Hamilton:
It is good to see that a target on the turnaround times of responses to appeals that are made to the Department is to be included in the corporate plan. That was certainly something about which the Committee expressed an interest in its report. Another such issue was the publication of appeals decisions: what is the Department’s position on making that process a bit more open?

Mr McCrystal:
That rests with me at the moment. Appeal cases are dealt with on an A-to-Z basis, and over a period of time, particularly when dealing with appeals that fall under the same section of the regulations, there is a great deal of commonality. We have taken all the common elements of an appeal and published those on our website as part of an overall guidance note to try, hopefully, to minimise the number of appeals and complaints that we get.

It rests with me to look at the details of each case and to consolidate and, in some cases, anonymise the appeal — for example, we cannot flag up on our website that Mr Hamilton made an appeal to the Department and that it was not upheld. We will anonymise such instances. We are following through on that, and I apologise for the delay in getting it done.

Mr Hamilton:
In its report, the Committee sought recommendations on the availability of trained staff that are able to assess and credit energy performance certificates. What does the Department consider to be the optimum — or required — number of assessors to do that work?

Mr McCrystal:
I cannot answer that because it depends, in some respects, on the state of the market. Any figure that I could give you today would be quite low, but on the other hand, if the requirements had been introduced 12 months ago, that figure could have been significantly higher. All I can say is that there is an adequate number of assessors, some of whom are quite busy and others who are underemployed. For many of them, that is not their sole business: it is an add-on service that they provide to clients.

Mr Hamilton:
Finally, how does the current average cost of the energy performance certificate compare with the original estimate?

Ms Hagan:
I will reply to that question. When we were speaking to estate agents last Friday and Monday, part of those discussions was to ascertain whether they had information on how much the certificates were costing. On average, from the estate agents that I spoke to — and I think that this concurs with information coming from colleagues — a certificate can cost anywhere between £80 and £120, particularly in the Belfast area, and they are perhaps slightly more expensive in rural areas. That appears to be a reduction on initial charges, which may lead me to conclude that there are enough energy assessors around and that the prices that they are charging have reduced slightly since the requirements first came on stream.

Mr Hamilton:
What is the reason for the differential? Is it due solely to market forces?

Ms Hagan:
It is probably due to market forces. Some estate agents have in-house energy assessors, and others are contracting assessors from elsewhere. That can sometimes account for price differentials.

Mr McCrystal:
The time that is taken to travel within rural areas could add to those costs.

Mr Hamilton:
By and large, however, is the average cost lower than what you had originally estimated?

Mr McCrystal:
It certainly seems to have come down. In the early days, complaints were made that some energy assessors were charging £200 plus VAT. The advice that we gave to people was that they should shop around because plenty of assessors are available.

The Landmark website lists all the available energy assessors, and if people search that website, they will be given a random number of assessors. Therefore, if someone does not like the estimate that they have been given, they can go to another assessor. I should say also that there is a facility on the website to check that an energy assessor is properly accredited. You can log in their registration number and it will give details about them. Therefore, a reasonable amount of cross-checking can be done.

Dr Farry:
The Minister’s letter states that he would like to make an announcement at the earliest opportunity on the availability of zero-carbon homes from 2016. Is that entirely contingent upon the legislation being enacted, or could that decision theoretically be made independently? What could prevent the Minister making that statement tomorrow? What particular obstacles would have to be overcome before he can make such an announcement?

Mr McCrystal:
Given that that announcement is not contingent on the legislation, there are no obstacles to prevent his doing that. We are fortunate in that the 1979 Order is the existing legislation that covers that matter, so that such a statement could be made. We may need to discuss it with the Minister, who may want to choose an appropriate forum in which to make that decision.

Dr Farry:
Potentially, therefore, an announcement could be made this side of Christmas, if not sooner?

Mr McCrystal:
Yes. I am sorry, I do not want to pre-empt what the Minister might say — we would have to discuss that in detail with him.

Dr Farry:
Yes, but does the potential exists for the statement to be made?

Mr McCrystal:
The policy has always been that we work in harmony with the requirements of building regulations in other jurisdictions. The difference is that there can sometimes be a time lag between the introduction of such regulations in each jurisdiction. The last amendment that was made to that part of the regulations was only six months behind the introduction of similar provisions in England and Wales, but sometimes that time could be shorter or longer. However, we expect to work with our colleagues on that. Even if the announcement has not been made, we anticipate that we will be working towards that target anyway.

Mr Paisley Jnr:
Whenever I read the words “guidelines”, “increased guidelines”, “regulations” or “more regulations”, the thought of red tape and fees sends a shiver down my spine. What work — if any — has been done to study the impact on fees for those who are involved in the trade to whom this legislation will apply?

Mr McCrystal:
The most recent fees regulations were produced in 1997. The fees, other than those for dwellings, are on a sliding scale, depending on the cost of the work. We recognise that those fees are somewhat out of date, and we have been having early discussions with building control to obtain feedback on the costs that it incurs in its work. We will propose a review of the fees regulations. Without trying to avoid your question, that work has not yet been completed, and we will be coming back to the Committee with those proposals.

Mr Paisley Jnr:
Will that work be complete before this Bill is passed?

Mr McCrystal:
No. The Bill will give us primary powers; the fees regulations would relate more to the technical requirements that are in the building regulations, which are obviously the subordinate legislation.

Mr Paisley Jnr:
I understand that, but we will be asked to support legislation without having been made aware of the full impact of the fees. From an examination of some of this, it looks as though the fees could be quite extensive. Is that correct?

Mr McCrystal:
These are primary powers that will give the Department the authority to make regulations. Obviously, officials will have to come back to the Committee to ask for approval to make further regulations. The Department will also have to consult publicly on all those matters. At this stage, therefore, it is not a matter of the Committee signing a blank cheque. This legislation will give the Department the power to act. However, if the Committee decides that that is an issue on which it does not want the Department to proceed, then it will not happen.

Mr Paisley Jnr:
Why are the fees on a sliding scale — or, it would be more apt to say, a climbing scale? I rarely see them going down. They are on an upward escalator, and some of them, according to my passing knowledge of the industry, are quite high.

Mr McCrystal:
The fees for an individual dwelling are about £250, which is much lower than in planning or other areas. There would have to be a sharp hike in fees for individual dwellings in order for them to be seen as comparable. There must be some give and take between domestic and commercial properties, and that is why a lot of foundation work must be undertaken before officials return to the Committee with proposals on fees.

Mr F McCann:
As regards dangerous buildings; following especially well-publicised accidents there are usually debates in which it is said that those accidents might not have happened had regulations been tighter. There now seems to a debate about who is best placed to enforce those regulations. Local building control officers say that they should be responsible, so that there can be a local, hands-on approach. Obviously, the Department has many years of experience in the matter. Who is best placed to carry out enforcement; and when can legislation be expected?

Mr McCrystal:
The Department made a proposal in the original draft of the Bill. However, the more that we discussed the matter with building control, the more it became clear to us and to them that what was being proposed would dilute the powers available to them under other legislation. Plenty of control measures exist, but the legislation is very old. Building control had asked the Department to bring some of that legislation together in what is now being proposed.

However, the difficulty is that because we are referring to building regulations in the Bill, we could not cover dangerous places. If the Department were to repeal some of the legislation that is available to building control, there would be nothing to cover dangerous places. It was felt to be much safer to leave matters as they are and discuss how all of the requirements could be best consolidated. Building control and local councils are aware of the legislation with which they work, and the Department did not want to compromise their position as regards what they can do with regard to dangerous buildings and dangerous places.

Mr F McCann:
Do you know when those discussions will conclude?

Mr McCrystal:
Officials will be meeting building control next week, and this matter will be on the agenda. Over the summer, building control officers became involved in flood work and suchlike, and a lot of resources were diverted from this issue.

The Chairperson:
The Committee addressed the problem of developments proceeding on out-of-date plans. I have read the Minister’s written response. However, is there a timeframe for an amendment to close that loophole?

Mr McCrystal:
The Department will start work on amending all of the regulations, including the amendment to Part A, which is the interpretation and application. By the time that the development process, consultation and notifications to Europe are completed, it is generally two to two-and-a-half years before a wholesale change is in place.

The Chairperson:
Two-and-a-half years?

Mr McCrystal:
The Department has an outline programme, but no detailed programme. I hesitate to give the Committee a particular timeframe, but it is likely to be about two-and-a-half years.

The Chairperson:
This is not a major issue. Surely it could be dealt with as part of the process of introducing the Bill, so that all of the amendments land on the table at the same time?

Ms Hagan:
Our plan is to make all of the amendments at the same time. However, there are many regulations involved, and — as a result of the different powers in the Building Regulations (Amendment) Bill, and updates — it will be necessary to review all parts of those regulations. The Department intends to look at the matter in one fell swoop and make a new set of up-to-date regulations.

We could also make one amendment to deal with the issue that you have raised. However, that would also take some time, because the same processes would have to be followed. Furthermore, it would lead to yet another amendment, which would make the legislation more piecemeal. Since it is not a big problem, and evidence does not suggest that the practice is commonplace, we thought that it would be better to wrap it up with the other amendments that are required to be made to update the entirety of the Building Regulations ( Northern Ireland) 2000. That will take a couple of years.

Mr Beggs:
Why will it take two-and-a-half years to amend regulations to state that when building control has been given —

Ms Hagan:
I did not say that it would take two-and-a-half years to do that; I explained that that would take less time — but it will take time. On average, it takes one year to complete a piece of subordinate legislation, by the time the policy is drafted and issued for consultation, and if it is a short, sweet, acceptable and uncontroversial piece of subordinate legislation.

Mr Beggs:
It seems to be a lengthy process.

Ms Hagan:
The procedure is laid down in the subordinate legislation handbook and must be followed.

Mr Paisley Jnr:
The solution is to employ more lawyers — and no one wants to do that. [Laughter.]

Mr McCrystal:
If we were to introduce a requirement without proper consultation, there is a possibility that it would be subject to challenge.

Ms Hagan:
A consultation alone takes 12 weeks.

Mr McCrystal:
Chairman, do you wish the Department to develop this as a separate issue?

The Chairperson:
It is such an obvious issue. There may or may not be a problem, but, with current pressures, people might see opportunities, and it might become a problem. It is an issue worth considering, because it does not seem as if it would be too complicated to close the loophole and ensure that it does not become a problem.

Mr McCrystal:
The significant element is in the thermal fabric of new buildings. That seems to be the part of the regulations which, perhaps, would cause most concern.

The Chairperson:
The houses could be built and the responsibility passed to the new owners.

Mr McCrystal:
From the end of September, all new buildings will be required to have an energy performance certificate. We have been at pains to inform the construction industry — and everyone else we have spoken to — that the certificate will contain a benchmark of what the building would have achieved had it been built to the building regulation standards that were in operation on the day that the certificate was issued. We have, therefore, been at pains to inform developers that the certificate contains two energy performance measures — one for the actual building and one stating what the energy performance could be.

Builders have told us that they will review plans, which have been approved through building control, with a view to upgrading them, because inefficiencies in the buildings will have been highlighted.

The Chairperson:
I presume that you believe that that will have the same effect.

Mr McCrystal:
That was our view on our previous visit to the Committee, because of the high energy prices. Given this morning’s announcements, energy consumption and its cost will affect everyone.

Mr Beggs:
During evidence sessions, the Committee heard that some houses have been built according to 30-year-old regulations. That meant that some buildings did not meet the regulations regarding disability access, for instance. It is a nonsense to allow that to happen. There are, therefore, problems with disability regulations as well as with energy performance.

Ms Hagan:
I would stress that there has perhaps been one instance of that in a number of years, so I suggest, respectfully, that it is not common practice.

Mr Beggs:
How do we know the scale of the practice?

Mr McCrystal:
If it were a significant difficulty, building control would be reporting the extent to us, but they have not done that. We meet building control on a quarterly basis — our next meeting is next week — and we can ask them for feedback on that.

The Chairperson:
It may be worthwhile asking the question, but the Committee has also not received any evidence to indicate that there is a significant problem.

As regards sustainable homes, the guidelines reflect the minimum standard and the code sets a higher standard. Why is there a differential? Why do they not operate to the same standard and be reviewed periodically at the same time?

Mr McCrystal:
The code is intended to flag up future changes in building regulations, thereby giving the industry advance warning of future requirements. It is also used as a vehicle for social housing, in which the buildings tend to be built to the higher standard — code level 3. The idea is that building regulations represent the minimum standards required but that the higher standards introduced in the code give the industry early warning of how things will develop over the years.

The Chairperson:
We are looking forward, with very clear targets being set out, and yet there is a differential. We are also being told — and evidence suggests — that the code is generally applied. The regulations set a minimum standard and the code is being accepted and applied. Why is there a differential at all?

Mr McCrystal:
The code is being applied to social housing primarily. However, houses in England and Wales can now be assessed against the code. Those houses will get a code rating that developers can use as a marketing tool.

The Chairperson:
That does not explain why the opt-in or opt-out option exists. If the Department has a specific outcome of the review of regulations in mind, why can it not be specific? Why can it not codify the requirements and apply them across all developments, social or otherwise?

Mr McCrystal:
The code has only been introduced in England and Wales in the last 12 months or so and, as a starting point, it is being applied to social housing. However, research developments are taking place to find out how efficient buildings can be — whether they can be code level 5, code level 6 and so on — and what the cost of that is likely to be.

The Chairperson:
That is not really my point. The argument almost seems to be that this is how it has always been done and that it will not change. Surely, there is an opportunity to mark out the required threshold and apply it across the board. Would that not simplify life for everyone, in terms of enforcement and delivery?

Mr McCrystal:
The building regulations do that: the minimum standard is set out and is applied universally.

The Chairperson:
The code sets a different standard.

Mr McCrystal:
There are quite a lot of other standards, such as the Building Research Establishment Environmental Assessment Method (BREEAM) standards for non-domestic buildings and those for eco-homes. There is nothing to prevent a developer building to those standards and using the higher standard as a marketing exercise, or an individual building his or her house to the higher standard.

Mr McKibbin:
It may also be worth pointing out that the proposed amendments to Part F in 2010-13, which Seamus mentioned, will take building regulations to code level 3 and code level 4 equivalents. An announcement about 2016, if it is made, will be that there will be a code level 5 zero-carbon equivalent.

The Chairperson:
Is that a convergence target that we could work towards, or will a differential always be maintained?

Mr McCrystal:
A differential will always be maintained. The code is intended to set standards higher than the building regulations and give the industry an indication of future changes to building regulations. Code level 1 is a higher standard than building regulations, which are the bottom-line catch all. However, as I said earlier in relation to thermal insulation, the standard in new-build housing is very high.

The Chairperson:
Seamus, Gerry and Hilda, thank you very much for your assistance.

Mr McCrystal:
Gerry McKibbin said that the Department will hold seminars on energy performance certificates on 16 and 17 September 2008 at the Balmoral Hotel, Blacks Road. Unfortunately, the first seminar coincides with business in the Chamber, and the second presentation coincides with a Committee meeting. However, members are welcome to attend.

The Chairperson:
The Committee might be able to arrange representation at the event. Thank you very much; general response to the work has been positive.

The Bill’s Consideration Stage is likely to take place on 7 October and will include a debate on the amendments tabled by the Minister. Subsequently, members can discuss the Bill’s wider issues during the Final Stage.