Charges for Building Control
The Building (Local Authority Charges) Regulations 2010 (SI 2010/404) (the 2010 Regulations) were laid before Parliament on 25 February 2010 and come into force on 1 April 2010. The 2010 Regulations revoke and replace The Building (Local Authority Charges) Regulations 1998 (SI 1998/3129) (the 1998 Regulations). They make new provision authorising local authorities (LAs) in England and Wales to fix their own charges in a scheme, based on the full recovery of their costs, for carrying out their main building control functions relating to building regulations.
The 2010 Regulations contain a transitional provision which allows LAs to introduce a new charging scheme under these regulations any time between 1 April and 1 October 2010, although they must to do so by the latter date. This will enable those LAs who wish to take advantage of the new flexibilities to do so at the earliest opportunity, whilst allowing those who need more time to implement the changes longer to adopt the new charging regime. LAs continue to be required to publicise the making of a new (and replacement or amended) charging scheme in their areas at least 7 days before it comes into force. .
The Department has issued Circular 01/2010 which explains the purpose of the provisions of the 2010 Regulations and how they differ from the previous 1998 Regulations.
The Department has also issued a Circular letter to Building Control Bodies which provides further general guidance on implementation of the 2010 Regulations.
The Chartered Institute of Public Finance and Accountancy (CIPFA) will shortly be publishing updated guidance, titled Local Authority Building Control Accounting Guidance for England and Wales, to assist LAs in determining the costs of carrying out their chargeable building control service relating to building regulations that they should be seeking to recover when setting their charges under the 2010 Regulations. When available, this guidance can be purchased through the CIPFA website.
Background on The Building (Local Authority Charges) Regulations 1998
The Building (Local Authority Charges) Regulations 1998 (the 1998 Charges Regulations) came into force on 1 April 1999 and require local authorities (LAs) to fix and publish their own individual charges in a ‘scheme’ according to a number of principles, in particular that they should be based on the cost of carrying out their main building control functions.
These regulations replaced the Building (Prescribed Fees) Regulations 1994 (SI 1994/2020), which contained centrally prescribed fees that all LAs were required to charge across the whole of England and Wales.
The former DETR and Welsh Office issued a circular (‘Environment Circular 10/98’ / ‘WO Circular 39/98’) in December 1998, which provided general guidance on the policy and content of the 1998 Charges Regulations and the information that should be included in a local authority charges scheme. The Local Government Association (LGA) has also prepared a ‘Model Scheme’ – which is regularly updated – to assist LAs in preparing their own schemes.
Accounting and Monitoring
LAs are required by the 1998 Charges Regulations to fix their charges with the aim of fully recovering the costs only of carrying out their main building control functions over a three-year continuous (ie: rolling) accounting period. They are also required to prepare a building control statement each year, for the purpose of their accounts, giving details of their income and costs/expenditure.
The Communities and Local Government / Welsh Assembly Government (WAG) carried out an annual monitoring excercise until 2006/07 to ascertain whether LAs were complying with the accounting requirement to fully recover their costs and to ascertain the level of any surpluses arising. This was a voluntary arrangement, which was established with the agreement of the LGA but it was suspended pending the review of the charging regime.
Copies of past Communities and Local Government’s circular letters to LAs requesting their annual monitoring income and costs/expenditure returns can be found on the Department’s website under divisional circular letters. These letters also give the Communities and Local Government’s views on how LAs should treat any surpluses arising (see letter dated 15 May 2001 in particular).
A minor amendment was made to regulation 5(1) of the 1998 Charges Regulations, by article 12 of ‘The Local Authorities (Capital Finance) (Consequential, Transitional and Saving Provisions) Order 2004’ (SI 2004/533) effective from 1 April 2004. Part 1 of the Local Government Act 2003 replaced the old capital finance system under Part IV of the Local Government and Housing Act 1989, which was repealed on 1 April 2004. The amendment to regulation 5(1) simply updates the reference therein to “proper accounting practices” accordingly.