Ms Orla Hegarty:

I thank the joint committee for the opportunity to attend this morning's meeting. I am an architect and an assistant professor at the UCD school of architecture, planning and environmental policy. My area of expertise is construction regulation, procurement and the operation of the construction industry in Ireland. I have direct involvement and experience in national and EU systems for regulating qualifications and assessing competence. The purpose of today's session is pre-legislative scrutiny. This provides us with an opportunity for public analysis and feedback on draft legislation. In preparation for this session, I have reviewed the draft construction industry register Bill and consulted widely on the technical workings and implications of this policy initiative.

In summary, a sustainable and robust construction industry needs an effective building control system, an efficient construction sector, a flexible labour market and a fighting fund for remedying defects. No single one of these parts can be looked at in isolation. The regulation of certain professions, trades, builders and developers is necessary in the interests of public safety, environmental protection and consumers. Restrictions on activities must be justifiable and proportionate. Targeted robust regulation is required in specific areas of high risk because the legacy of defective and dangerous buildings cannot be repeated.

There are shortcomings in the proposed general scheme of this Bill, which relates to the Irish construction industry register, or CIRI. There are inadequate consumer protections, particularly for home buyers. There is no mechanism for consumer redress to repair defects. There are inherent conflicts of interest. CIRI is not independent. The absence of independent regulatory oversight of CIRI is not in accordance with best practice. Restrictions on the activities of builders and trades are not in compliance with EU law. In certain respects, this legislation duplicates or is incompatible with the activities of other State agencies and organisations. There is inadequate stakeholder consultation, evaluation of alternatives and regulatory impact analysis. There is no cost-benefit analysis or evaluation of the administrative and technical capacity required to deliver CIRI. There has been no assessment of the impact on competitiveness in the construction industry, particularly with regard to restrictions on labour supply.

What is the State's role here? Why is regulation necessary? When it comes to buildings, the role of the State is primarily protection of life. It seeks to ensure buildings are safe and sustainable. This includes fire safety, ventilation, soundproofing and structural integrity, as well as protection from falls, radiation contamination, carbon monoxide and other dangers to the health of occupants. Other risks include environmental damage, energy inefficiency, sewage contamination and dangerous materials. A secondary requirement is protection of property to protect consumers who buy a product, in effect. Not all consumers need the same level of protection. Home buyers are particularly vulnerable. For the public, buildings must be safe to use and must not be damaging to their health. For the State, buildings must be energy efficient and must not cause damage to the environment. The priority for the home buyer is fixing the problem. CIRI does not provide a mechanism or a fund to repair defects.

How many builders will be affected by this? There are 100,000 construction companies, self-employed subcontractors and tradespersons in this sector. According to a survey conducted by DKM and SOLAS, approximately 70% of construction firms are self-employed with no employees and direct employment is expected to increase to approximately 213,000 by 2020. On this basis, it is possible that approximately 150,000 companies and individuals will have to be assessed for competence and will have to register in order to work. CIRI currently has approximately 800 members. The cost of putting this in place, and the delays associated with that, have not been calculated. What is needed? Registration for builders was flagged by the Department in 2012 in a document on its future focus of policy. It emphasised that registration should be in keeping with competition law, include strong quality assurance checks, provide strong consumer protection, have the cover of insurance and not add excessively to the cost of housing. These five policy objectives have not been addressed in the CIRI legislation.

I recommend there should be a future-proofed system that is aligned with other policy objectives that include construction growth and efficiency, better procurement and insurance, developments in the State building control structures, supports for training and skills and tax compliance. There should be an independent flexible and scalable registration system that is appropriate to risk and complies with EU legislation. Perhaps such a system could be similar to the CORU model for the regulation of health professionals. The system should not create barriers to trade or have an impact on construction competitiveness or SME costs. It should be possible for it to be rolled out strategically without causing delays and blockages in the construction sector. Independent regulatory oversight and enforcement of construction is essential to ensure public safety and environmental protection. There should be consumer-focused systems of protection and redress, with a single point of contact for complaints and remediation across the construction sector.