Guidance

Responsible Actors Scheme: key features (published 24 March 2023, now superseded by regulations)

Updated 15 February 2024

Applies to England

Aims of the Scheme

The government intends to implement a Responsible Actors Scheme (“the Scheme”) for residential developers under sections 126-9 of the Building Safety Act 2022. Subject to the will of Parliament, the regulations will be brought into effect by early Summer.

The Scheme will aim to improve the safety and standard of buildings by requiring that any member of the Scheme must:

• Identify 11m+ residential buildings they developed or refurbished over the past 30 years and any of those buildings known to have life-critical fire safety defects.
• Remediate and/or mitigate, or pay for the remediation/mitigation of, life-critical fire safety defects in those buildings; and
• Reimburse government schemes for taxpayer-funded work to remediate and/or mitigate defects in those buildings, thereby assisting government to be able to pay for and implement remediation schemes designed to make buildings safe.

These requirements are in accordance with the terms of a developer remediation contract with the Department for Levelling Up, Housing and Communities (DLUHC).

The Scheme will be supported by planning and building control prohibitions that impose commercial consequences on any developer who is eligible for the Scheme but does not sign up to it and comply with its membership conditions. The prohibitions will be applied simultaneously and in conjunction with one another.

This will create the right incentives for developers to remediate and/or mitigate defects in unsafe buildings and will make sure that developers who take on the cost of remediating unsafe buildings are not disadvantaged as compared to other eligible developers who fail or refuse to do so.

The regulations will make provision for company groups. For example, when dealing with a company group, the Secretary of State expects to nominate one entity to join the Scheme on behalf of others in the group.

Eligibility for the Scheme

The Scheme will initially focus on major housebuilders, and other large developers who have developed or refurbished multiple residential buildings that are known to have life-critical fire safety defects by virtue of having been assessed as eligible for a relevant government cladding remediation scheme.

The Scheme will over time be expanded to cover other developers who developed or refurbished defective 11m+ residential buildings and should pay to fix them.

Developers will be eligible for the Scheme if they meet one or more of three sets of criteria:

 1. Their principal business is residential property development; they meet the ‘profits condition’ below; and they developed or refurbished 11m+ residential buildings in England in the last thirty years (other than solely as a contractor).

 2. They are a developer who meets the ‘profits condition’ below; and developed or refurbished (other than solely as a contractor) multiple buildings that have been assessed as eligible for a relevant government cladding remediation scheme.

 3. They are a developer who developed or refurbished (other than solely as a contractor) at least one 11m+ residential building that qualifies for remediation under the terms set out in the developer remediation contract; and they volunteer to sign the contract and join the Scheme.

The ‘profits condition’ will be met by any developer whose average annual operating profit over a 3-year period (companies’ financial years ending 2017, 2018, and 2019) was £10 million or higher. Certain exceptional items and unrealised value adjustments will be excluded from consideration. The regulations will set out the detail of the profits condition, including the required adjustments to the operating profits figures in accounts.

Conditions of membership

A developer who is eligible for the Scheme may join and remain in it only if they meet its membership conditions.

The membership conditions will, at minimum, be that:

• Members of the Scheme must enter into a developer remediation contract with DLUHC. The standard form contract terms are available on GOV.UK.
• In accordance with the contract terms, a Scheme member must:
  
  
  • Identify 11m+ residential buildings they developed or refurbished over the past 30 years and any of those buildings known to have life-critical fire safety defects.
  • Remediate and/or mitigate or pay for the remediation/mitigation of life-critical fire safety defects in those buildings.
  • Reimburse government schemes for taxpayer-funded work to remediate and/or mitigate defects in those buildings.
  • Meet all other obligations of the developer remediation contract, including around keeping residents and DLUHC updated on the progress of work.
    
    
• Scheme members must comply with requests for information made by the Secretary of State pursuant to the contract and regulations, to enable the Secretary of State to carry out his monitoring and enforcement functions.

The Scheme may in due course impose additional membership conditions through regulations. Those may include the application of a ‘fit and proper person test’ to directors and senior managers of members of the Scheme.

Applying to join the Scheme

Where a developer appears eligible for the Scheme, the Secretary of State will invite them to join. The regulations will provide a reasonable period to either join the Scheme or make representations supported by evidence that the eligibility criteria are not met. If it is determined that the developer is eligible, they will be expected to join the Scheme.

Developers who have not been invited by the Secretary of State to join the Scheme will be able to seek a direction as to whether they are eligible and will be able to make representations supported by evidence as to their eligibility. Again, if it is determined that they are eligible, they will be expected to join the Scheme.

Eligible developers may join the Scheme by entering into a developer remediation contract with DLUHC (if they have not already done so) and committing to meet any other conditions of membership. The Secretary of State will add their name to a published list of entities who are members of the Scheme.

If an eligible developer opts not to join the Scheme, the Secretary of State will add them to a published list of entities to which the prohibitions set out in the regulations will be applied.

Monitoring and enforcement

Members of the Scheme will be required to provide evidence to the Secretary of State that they are complying with the conditions of membership, including by way of the quarterly returns stipulated under the terms of the developer remediation contract.

Should a member of the Scheme fail to comply with the membership conditions, their membership may be revoked. The regulations will give the member an opportunity to make representations before a final decision on revocation is taken. Where membership is revoked, the developer will receive confirmation in writing, and they will be added to the published list of entities to which the prohibitions set out in the regulations will be applied.

The Secretary of State will have the power to issue a formal warning to any member of the Scheme who appears to be failing to meet the membership conditions. In appropriate circumstances membership may be revoked without a prior formal warning.

The regulations will set out pathways for developers to be removed from the list of prohibited persons and have the prohibitions lifted by either joining the Scheme for the first time or returning to compliance with the conditions of membership (as the case may be).

The planning prohibition

The regulations will set out that prohibited persons will be prohibited from carrying out major development in England.

Major development includes schemes providing 10 or more residential units, residential schemes on a site at least 0.5 hectares in size (where it is not known if it will provide 10 units or more), commercial development creating at least 1000 square metres of floorspace, and development on a site over 1 hectare in size.

Prohibited persons will be required to notify the relevant local authority about their prohibited status when making relevant planning applications, reserved matters applications and prior approval applications. They will also need to notify the Local Planning Authority if they acquire or transfer an interest in land which has the benefit of planning permission for major development.

If development of land is carried out in breach of a prohibition, this will constitute a breach of planning control. Existing enforcement powers and offences, as modified by the regulations, will be available to enforce the prohibition.

The building control prohibition

The regulations will give effect to a prohibition that will prevent a prohibited person from gaining building control approval in respect of any building work that requires such approval.

In accordance with the regulations, prohibited developers may be unable to gain building control approval to start work, including through initial notices, as well as completion or final certificates for completed work. In some cases, this may result in a notice to terminate or suspend the work.

The prohibition will prescribe documents which a prohibited person is prevented from giving, and which local authorities and approved inspectors are prevented from accepting or issuing to a prohibited person or in respect of work carried out by them. This will include:

• Deposit of full plans, notices of passing of plans, and plans certificates.
• Initial notices.
• Completion certificates, final certificates, and certificates for buildings occupied before work is completed.
• Any other building control approval, including building notices, amendment notices, a notice of variation of work to which an initial notice relates, and regularisation certificates.

The prescription of regularisation certificates will mean that a prohibited person will be unable to regularise any work conducted without the relevant building control approval.

The regulations will include appropriate exemptions to ensure that works may be undertaken where necessary to secure the safety of users of occupied buildings.