Tag Archives: alan kelly

Is Irish Building Control a threat to Foreign Direct Investment?

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April 8th 2015

Are Building Regulations a threat to Foreign Direct Investment?

One area overlooked by commentators and policy makers in the Building Regulations debate are non-residential projects, and in particular foreign direct investment (FDI) projects. The massive costs and delays due to SI.9 introduction last March on the residential sector have been well documented, PMI and CSO indicators all showing an initial surge to get projects started before March, petering out towards the end of last year.

Richard Bruton T.D. at a meeting last year with the World Bank recognised that there was “…a fundamental link between competitiveness and job creation” (see more here).

It is remarkable that there has been no effort to address Ireland’s continued slide in international rankings for ease of construction. The World Bank in their annual “Doing Business” report compare 189 countries in the world in various sectors. Ireland’s overall country ranking is a reasonable 13th, ahead of competitors like Switzerland, Netherlands and Israel.

However when it comes to construction permits and building regulations the World Bank places Ireland at a dismal 128th place, way down between Algeria and Bolivia. For a typical FDI building, Ireland’s regulatory costs are over seven times those in the UK.

World Bank  “Dealing with construction permits” Ranking

The World Bank  take a typical production/warehouse building (13,000 Sqm valued at €1.46m), a standardised template for industry, and based on information from respective government departments calculates the time needed and cost of obtaining all relevant statutory permissions to enable owners to build and occupy buildings. Our direct competitor, the UK, is seen as a “best practice system.

The World Bank reports that the total cost to obtain permits for a typical FDI unit in the UK is €19,035 (£15,039 or 1.2% of the capital cost of the development) and includes 100% independent inspections for building control (approved inspector model). There are 12 procedures to get all statutory permissions for a typical unit and this will take 150 days. See detailed data for UK here (click on title):

Doing Business in United Kingdom – World Bank Group

By contrast in Ireland the cost of statutory fees is an eye-watering €138,379, or 9.4% of the capital cost. There are 38 procedures that take a minimum of 208 days (if owners risk various tasks being undertaken in parallel). These costs do not include our privatised self-certification system of Building Control. Planning contributions alone comprise €126,184 to this inflated cost in Ireland. See detailed data for Ireland here (click on title):

Dealing with Construction Permits in Ireland – World Bank Group

The next report could include additional S.I.9 costs will include design, assigned and ancillary certification costs, defensive specifications and delays due to inadequate Local Authority resources and staffing.

This could add an additional 7% of the capital cost of the development, or over  €100,000 for this building type. Our actual total costs for construction permits, if the real cost of our ‘off-balance sheet reinforced system of building control’ is included, may be more than 10x that in the UK.

Acknowledged by Minister Kelly as “using a  mallet to crack a nut” there is a risk that our fragile recovery and in particular the FDI sector will bear the brunt of ill-conceived regulations, reducing competitiveness, costing valuable jobs and putting our recovery in jeopardy. Conceived as ‘political solution’ for speculatve built housing issues, SI.9 has been applied without any cost-benefit analysis to the entire construction sector and is proving very costly to other non-residential building types. Over 60 school projects have been delayed and Government capital projects costs are increasing across the board.

The recent annual review of the building regulations announced by Ministers Kelly and Coffey excludes all non-residential buildings, with a political focus on once-off housing.

A significant 25% drop in overall building commencement levels in the 12 months since the introduction of SI.9 was confirmed in the Dáil last month.

Ireland’s ranking for “Dealing with construction permits” has slid from 117th in 2014 to 128th in 2015 – a drop of  11 places in one year. In this sector the UK, our main competitor, is placed 17th this year, well over 100 places ahead of Ireland.

Last month on RTE Radio One a number of business owners were complaining about the cost of planning contributions around the country. There is widespread concern that a failure to deal with ‘stealth’ charges is impacting on competitiveness and job creation, particularly for SME’s. The World Bank report provides an objective independent confirmation of the experience of these business owners.

Policy-makers in Ireland may be unfamiliar with the work of the World Bank investigations but international investors may be wondering when the ‘best little country to do business’ will catch up?

Other posts of interest:

World Bank Report 2015 | UK v Ireland the real cost of “Dealing with construction permits”

World Bank Report 2015 | Ireland’s poor construction regulations are the biggest drag on our ranking

World Bank Rankings, Ireland & SI.9 – Look Back 1

Press: lack of office space may affect FDI

FDI (Foreign Direct Investment) Projects & BC(A)R SI.9

€ 5 billion | The extraordinary cost of S.I.9 self-certification by 2020

Practical posts 3: Change of Use – FDI and offices

FDI (Foreign Direct Investment) Projects & BC(A)R SI.9

Everything you wanted to know about “Approved Inspectors”

Collins & O’Cofaigh | “the 38 steps” and the complexity of our regulations

Surveyors call for examination of Building Regulation costs

SI.9 | What’s another year?

one-year-on

 27 February 2015

In two days time, on Sunday, 1st March 2015, the Building Control (Amendment) Regulations SI.9: 2014 will be one year old. It has become clear that issues with SI.9 are not just ‘teething’ problems that will settle down. In fact many in the construction industry who embraced the change are now struggling with legal and practical implementation problems that cannot be resolved within the legislation.

The BRegs Blog has brought together a community of industry experts and commentators as we reach this important milestone and the imminent review of the legislation. In the coming week or so we will be publishing a series of posts on SI.9 – one year on. This will commence on Monday.

The BRegs Blog is changing!

  1. The BRegs Blog will launch a new e-zine this afternoon that gathers all SI.9 related information (tweets, photos, blogs, comments and other media links) into one easily accessible weekly digest. It will be published each Friday lunchtime as an alternative to the Saturday Summary.
  2. On the last Saturday of the month we will publish a Top Five of each month’s most read posts. This will publish tomorrow.
  3. In parallel with condensing relevant news feeds into single ‘editions’ the BRegs Blog will be posting fewer posts that are more considered with news items moved to the Friday E-zine’.

The BRegs Blog is stepping up to put forward real practical solutions for an effective system of Building Control. The blog continues to enjoy extraordinary support from most representative sectors of the construction industry. The minimal criticism being made would appear to be from those who don’t read it or are challenged by any questioning of SI.9.

The BRegs Blog promotes effective Building Control improvements and best practice standards of inspection.

Thanks for your continued support,

BRegs Blog Admin. Team

SI.9 | Minister Alan Kelly T.D. has been listening!

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Minister for the Environment, Community and Local Government, Alan Kelly T.D.

In his strongest statement to date, the Minister for the Environment, Alan Kelly T.D., has indicated that the much criticised SI.9 Building Control Regulations are to be reformed to ease the burden on hard-pressed building owners and rural dwellers in particular. The Minister was speaking to political journalist, John Drennan, in yesterday’s Independent (Link to full article: here)  and revealed that he plans to reform building regulations as a priority. A detailed announcement is expected later this month.

Extract:

“The minister said that when it came to small developments, houses and extensions, the current rules were ”like using a mallet to crack a nut. We cannot continue with the present regulations for one off houses, extensions and small developments. Regulations need to be simpler to understand and comply with for people in the countryside who want to build their own houses; you don’t want them facing unexpected costs.

Building regulations are important, but you don’t need the same conditions for an eight-storey apartment as an extension to a three-bedroom house.”

The full article in the Independent covers a range of additional items including An Bord Pleanala, rural regeneration, wind farms and a new Planning Bill to also “crack down on large multiples that are holding vacant sites”.

Other posts of interest:

SI.9 | Is change in the air?  26 January 2015

Look forward to SI.9 review in January 2015  | Minister Paudie Coffey   01 January 2015

‘Onerous’ Building Regulations must be amended – Minister Kelly  29 November 2014

Imminent changes to SI.9 announced | Minister Alan Kelly T.D.  28 November 2014

Revoke S.I.9 – Fine Gael internal report to Phil Hogan in 2013  01 November 2014

40 sq.m. Question | Review 2 of the issues

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Review 2  – 20 January 2015

How many houses have been altered in Ireland where first floor bedroom windows have been replaced without the provision of the required unobstructed openings for escape in the event of a fire or attic conversions undertaken without adequate structural supports? Vast numbers of homes have been renovated in this country without even the most basic compliance with Building Regulations Part L: Conservation of Fuel and Energy which has a seriously negative impact on the value of our national housing stock and our ability to meet carbon emission reduction targets. With almost all fire fatalities* occurring in residential buildings is there not a case that every project should have some sort of third party oversight by competent inspectors even if it is just to make sure the carbon monoxide detectors have been installed?

As part of this continuing BRegs Blog series on SI.9 and the 40 square metre question this post continues with an examination of the context of selecting a seemingly arbitrary 40 square metre measurement in relation to assessing project size for an exemption from the ‘additional requirements’ of SI.9; one could ask why not 4 square metres or 400 square metres? Equally one could also ask if any building works at all should be exempt from Building Control by not having to issue a Commencement Notice?

It is worth noting that the SI.9 Building Control Regulations are different to the Building Regulations. SI.9 is a set of rules to define Building Control procedures. It is not a specification for better building. The Building Regulations specify requirements in relation to Structure, Fire Safety, Ventilation etc. and apply to all building work whether a Commencement Notice is issued or competent certifiers appointed.

It appears that the 40 square metre figure arose from the identical figure used for planning permission exemptions in the Planning Act 2000 legislation as defined in SI. 601:2001. In assessing the merit of using the same figure in SI.9 it is worth borrowing a line from the recent BCMS appeal for assistance with resolving separate difficulties with SI.9 and the completion of multi-unit developments. It said:

“In this context it is appropriate to highlight the dangers of combining and confusing regulatory codes that are entirely different, though they all deal with building or site development.”

Unfortunately this statement neatly describes the difficulties now being encountered with SI.9 and the 40 square metre question. Planning and Building Control have different purposes. Planning is more about about the amenity of your neighbours while Building Control is about the safety and welfare of your family or occupants of a building. If one accepts that there should be exemptions from Building Control for smaller or simpler projects on the basis of “sure, what could go wrong?” then the smaller projects must be examined individually. There has been no logical interpretation of a cumulative approach to exemptions. If a less that 40 square metre extension to your house is exempt from Building Control this year than how can the 2 square metre extension next year not be? There are valid reasons to consider multiple extensions cumulatively from a planning control perspective but not building control. There is no substantial likelihood that any building owner will attempt to circumvent Building Control legislation by building a house in increments of 39 square metres or less. Is this the motivitation in the Department of the Environment or is it a desire to ensure every new porch extension has a professional appointment and a CIRI-registered building contractor?

If a Commencement Notice is issued with or without ‘additional requirements’ the Building Control Authority are on notice and can inspect the building works at any time. With regard to the question if any building works should be exempt from Building Control by not having to issue a Commencement Notice it is worth considering the small scale projects outlined in the opening paragraph above that may be exempt from issuing any Commencement Notice but that may have serious implications for the welfare of occupants.

In future posts on this issue we will be highlighting the varying interpretations of the 40 square metre question that the BRegs Blog has come across and a commissioned opinion, bearing in mind the law is the law and one cannot interpret intent.

*In 2013, (the most recent year for which figures are available) 21 of the 24 fire fatalities in Ireland occurred in residential accommodation. (Link to figures:)  

Links to previous posts on this issue:

40 sq.m. Question | Review 1 of the issues | 19 January 2015

When is an extension not an extensions: the 40 sq.m. question 

Phil Hogan | SI.9…”will only apply to works involving the addition of an extension which is greater than 40 sq.m.”

± 40 sq.m. | “Exemption should avoid controls on minor development”

‘Onerous’ Building Regulations must be amended – Minister Kelly