Beyond Gateway 2

In November, we wrote about how the regulatory regime for higher risk building (HRB) works was bedding in, looking at available data on how applicants have fared at Gateway 2 (Building Safety for Higher Risk Buildings – How is the Regulatory Regime bedding in?). 

This next series of three articles considers the potential impact of building safety legislation beyond the Gateway 2 approval by the Building Safety Regulator (BSR).

• Firstly, we consider the BSR’s control over changes to what had been approved under Gateway 2 under The Building (Higher-Risk Buildings Procedures) (England) Regulations 2023 (the HRB Regulations).
• Secondly, we will take a closer look at Gateway 3 and the practical issues parties may face in passing through this gateway.
• The final article will consider the occupation phase of the building, and some of the potential issues that can arise for higher risk buildings due to the Building Safety Act 2022.

The delays in parties obtaining Gateway 2 approval have been well publicised and the further involvement of the BSR beyond Gateway 2 (with all the best intentions) has the potential to cause further significant delays to a relevant development and, in turn, delivery against the Government’s ambitious target of building 1.5m new homes in its first five year parliament.

Change Control – Post Gateway 2 Approval

Changes to the Works

Once Gateway 2 Approval has been obtained, there are certain ‘changes’ to the works which are:

• a ‘notifiable change’ – must be notified to the BSR before work related to that change can start; or 
• a ‘major change’ – must be approved by the BSR before work related to that change can start.

A notifiable change is broadly a change that could impact on compliance with Building Regulations. 

A major change is a change that would undermine the basis on which Gateway 2 approval was granted.

Regulation 26 of the HRB Regulations contains further detail on what would be a notifiable or and a major change. 

Applying for approval to a major change and notifying notifiable changes can be done online. 

Costs of Application to the BSR

Currently, an application for a major change approval and notifying a notifiable change costs £189 plus £151 per hour for the BSR staff (including the multi-disciplinary team). The BSR will also charge costs the BSR incurs from relevant authorities or third parties.

Major changes and notifiable changes which are related to each other may be submitted under a single application; unrelated changes must be submitted under separate applications.

This is in addition to the requirement for the principal contractor (or sole contractor) to maintain a change control log to record what changes have been made. Some changes, which are neither notifiable nor major, would need to be recorded in the log.

Timescales for Approval

Major Changes

The BSR is required to determine its approval of a major change within six weeks of when the application for approval is received by the BSR or within such longer period as the BSR and the applicant agree in writing.  

Further, the BSR must grant the application unless the application:

• does not contain the information required by regulation 21 of the HRB Regulations;
• is not sufficiently detailed to allow the BSR to determine contravention with any applicable requirements of the Building Regulations;
• shows contravention with any applicable requirements of the Building Regulations;
• shows the strategies, policies or procedures in any document approved by the BSR would or would be likely to contravene certain provisions of the HRB Regulations or the dutyholders and competence provisions in Part 2A of the Building Regulations.

The BSR may grant its approval subject to one or more requirements.

The BSR’s rejection notice must include its reasons for the rejection.

The clear issue here is of course that a major change may be on the critical path which then leads to delays whilst awaiting BSR approval for the change.

Notifiable Changes

Although a notifiable change has no timescales attached to it and only requires notification, the BSR does have the power to specify a ‘notifiable change’ as a major change. In that scenario, work related to that change needs to stop until an application for approval of a major change is made and granted by the BSR.

Practically, therefore, a development may be programmed on the basis of a notifiable change only for that programme to be rendered obsolete if the BSR considers it a major change instead.

Appealing the BSR’s decision

The BSR may be requested to review a decision to reject an application for a major change, provided that the review request is made with 21 days beginning with the date on which the BSR provided its decision. The BSR must then notify the person who required the review of the outcome within 13 weeks beginning with the day after the day on which the person gives the notice to review.

The BSR’s reviewed decision can itself be appealed by lodging an appeal with the First-tier Tribunal provided that the appeal is made with 21 days beginning with the date on which the BSR provides its decision. 

If the BSR misses the six week period?

If the BSR fails to reach a decision within six weeks a ‘non-determination application’ can be lodged to ask the Secretary of State to approve the major change: 

• This application must be made within six weeks at the end of the last day the BSR should have determined the major change application; and 
• The BSR must be given two working days’ notice before the application is lodged. 

The Secretary of State has the power to appoint someone to determine non-determination applications in their stead.

There is no statutory time frame for the Secretary of State to make a determination and once the non-determination application process is started, the applicant cannot request that the process be stopped and return the application to the BSR for a decision.

Exactly what the process is to determine such an application is currently unclear. 

The HRB Regulations provide that the BSR must be given the opportunity to make written representations, and the Secretary of State may give any other person the same opportunity. Further, the Secretary of State may require the BSR to provide information and can hold such meetings and undertake such visits, testing or inspections as the Secretary of State considers appropriate. It therefore has the potential to be a time-consuming and involved process – not ideal for live construction works.

Importantly, if a non-determination application has not been made within six weeks after the last day the BSR should have determined the major change application, the major change application is deemed rejected.

If the Secretary of State makes a decision, it is possible to appeal that decision with an application to the First-tier Tribunal, to be made within 21 days after that decision.

Diagram 1 at the end of this article shows a flowchart that summarises the process described above.

Practical Problems

Given the industry’s experience with Gateway 2, the major change procedure is likely to cause significant delay and disruption for HRB developments. Feasibly, a development may have to wait six weeks for a major change application to be decided only for it to be rejected, requiring a second application. In this scenario, 12 weeks could be lost if the major change application is on the critical path.

Further, the BSR may not make its decision on a major change application within the statutory six weeks.  In this scenario, the applicant is faced with a choice: 

• gamble that the BSR will revert with a decision in the next six weeks and wait, risking an automatic rejection if the BSR does not revert with a decision within those six weeks, or 
• lodge a non-determination application taking the risk that the Secretary of State will be faster than the BSR. Without clarity on how quickly these processes actually take to complete, developments will suffer from significant uncertainty on how best to proceed.

Whilst we do not have details of how many major change applications have been determined by the BSR within the required six weeks, the delays reported at Gateway 2 and Gateway 3 make this a cause for concern.  

It also raises questions as to who should typically take the risk for this: the employer or the contractor? 

• Some risks may fall cleanly into one or the other, for example if amending a design detail is found to require a major change then the party with whom design risk sits would likely take the risk.
• Others may not be so simple; for example, a product approved as part of Gateway 2 may not be available or may be discontinued. Where this happens, it is likely neither the employer nor the contractor’s fault and it will be up to the parties in question to have allocated the risk in their contract.

Diagram 1