Builders may have to upskill to meet higher standards under the overhaul of the Building Act

Thursday, 11 July 2019

The Government is proposing a major overhaul of the licensed building practitioner scheme.

Scores of builders, maybe hundreds, may have to complete more training under the proposed overhaul of the Building Act.

As part of the act's review the Ministry of Business Innovation and Employment has proposed a major revamp of the licensed building practitioners (LBP) scheme where about 25,000 people, many builders, hold licences.

Reassessments of skill levels for all licensed building practitioners, new training, and having to pass a fit and proper person test are on the cards in MBIE's proposals.

The Government wants to bring commercial construction into the licensed builders scheme.

Importantly, it also wants to expand the scheme to require commercial construction companies to have LBPs to supervise other building staff and that might require another 12,000 LBPs. At present the scheme is only for homes and small to medium apartment buildings.

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To expand the scheme may be a big ask in an industry where the competency level for an LBP was deliberately set low when it started in 2007 because the industry was concerned it might lose too many experienced builders.

Higher standards expected of licensed building practitioners in the future

The LBP scheme is the main way of ensuring the construction workforce is competent, skilled and held accountable, MBIE says.

LBPs are building practitioners who have been assessed as competent to carry out and supervise restricted building work, which is work essential to the structure or weathertightness of residential buildings.

Under the Building Act 2004 only an LBP is licensed to carry out or supervise restricted building work.

Builders on commercial buildings, mixed-use buildings and high-rise residential buildings, are not included and regulated under the LBP scheme.

The Government wants to extend the LBP scheme to include builders on these commercial buildings.

The Ministry of Business Innovation and Employment says the technical and competency levels are too low to be a licensed builder and the industry agrees.

MBIE proposes to raise the standards to be an LBP by lifting the levels of technical competency they have to meet, by introducing a fit and proper person test and by requiring them to comply with a code of ethics.

It wants to simplify the current types of licences and introduce two tiers of licence.

The first tier would be a licence of technical competency. The second higher level would be a specific licence for supervision.

'Training programmes will need to include new competency requirements for LBP licences,' MBIE says in its discussion paper.

'Every existing LBP' would be reassessed and new licensed practitioners assessed under the higher standards.

A small number of licensed builders might have to upskill to meet the new competency standards, MBIE says.

What do the building trade organisations think of the proposals?

Registered Master Builders Association chief executive David Kelly said the organisation supports raising the bar for residential builders.

The intent when the LBP scheme came into affect was that over time the technical competency requirements would be lifted to give confidence to the public and consenting authorities in the building industry.

It was a deliberate decision then not to set it too high because the concern was a lot of experienced builders would leave the industry. They saw the bureaucracy and paperwork as a nuisance.

This was the first proper review of the licensing scheme since then, and the general feedback from members was that competency standards were 'a little bit too low'.

But the extension of the licensing scheme to commercial builders, 'we're not so sure about that'.

There needed to be a good discussion with commercial contractors to understand how their systems worked considering the more numerous and complicated relationships on a large building project.

Registered Master Builders Association chief executive David Kelly says commercial builders are not convinced the licensed building scheme should apply to them.

'We're not convinced that simply introducing licensed building practitioner requirements to commercial contractors is actually the issue that we need to fix.'

'We believe that the real issues are in understanding how all that fits together and that really needs to be worked through with those companies who are specialists at what they do.'

Master builders wanted the Government to talk with some of 'the better, larger contractors' to help co-design a good process, Kelly said.

Asked how many licensed builders would require upskilling under the proposals, Kelly said 'I don't know that. I don't think anyone really knows.'

An MBIE spokesperson said it could not say how many LBPs would be impacted by the proposed changes.

In the initial consultation, MBIE was seeking feedback on the proposal to extend restricted building work and increase competency requirements.

'We are now considering the feedback received. Ministers are expected to make further decisions on what proposals to progress later in 2019. Work to finalise proposals will assess the impact on current LBPs,' the spokesperson said.

Kelly said part of the issue with licensed builders was signing off the work. The Government was asking what sort of skills and abilities were needed for supervising other people.

'That's a good thing that they're investigating this. That's an area that's been undercooked for quite a while, so we think that's a helpful discussion.'

'There are unfortunately a lot of tradespeople who haven't become LBPs because they don't want the accountability of signing off the work. And that's a bit of a worry so we need to say … how do we invest and really understand that supervision role.'

Chief executive of New Zealand Certified Builders Grant Florence said the LBP scheme had not met some of its original objectives. One was to provide confidence to homeowners and to consenting authorities, like councils.

'We don't think that's occurred.'

'It's good that they are raising the bar to become an LBP.' It was long overdue. It should also be compulsory to have a trade qualification to be an LBP.

The changes would take time and MBIE had acknowledged that in its consultation documents.

Florence said Certified Builders were involved in every workshop MBIE held last year on the proposed changes.

He did not have a strong view one way or the other on the expansion of the LBP scheme to commercial buildings.

MBIE had not addressed the power imbalance between a building company owner who was not an LBP and the LBP. The owner might tell the licensed builder to do something they disagreed with but the consequences fell on the builder.

One third of commercial buildings fail inspections, the ministry says.

A different type of licence for building company owners was needed as well, Florence said.

What are the main impacts of these proposals?

MBIE says the biggest expected impact would be on builders who worked only on commercial and mixed-use building projects. Those builders who carried out or supervised restricted building work would have to meet new competency standards and be licensed.

The reassessment of all existing LBPs might reduce the number of supervisors in the short term because they did not meet the higher technical and supervisory standards.

That could slow down the building industry.

It estimates another 8000 to 12,000 licensed builders would be needed if commercial buildings were included in the LBP scheme.

It says the public and consenting authorities would have greater confidence in the skills of the building industry.

There should be fewer building inspection failures and the need for remedial work, and the public would be reassured about the better quality and safety of buildings.

Why is an overhaul of the LBP scheme needed?

MBIE says the standards of competency to be an LBP are too low and builders themselves, consenting authorities and industry groups don't have confidence in the scheme.

Many builders rely on consenting authorities to identify non-compliant building work and to ensure buildings have been constructed to the consented plans.

Commercial buildings should be part of the licensing scheme because the buildings were generally more complex to design and build and had more risks for public safety than a residential building.

One third of commercial building inspections failed. Risks on commercial buildings were not managed adequately, while the industry has told MBIE commercial building was now more focused on pricing of risk than quality assurance.