Neoliberal Regulations: a race to the bottom?

This post argues that British building regulations and standards are 'neoliberal regulations', i.e., intentionally flexible, permissive, and subjective regulations and standards which allow design flexibility and the use of new materials, increase the need for interpretation and professional services, and create new regulatory markets and professions which set their own standards. However, neoliberal regulations also allow for “flexibility without adequate accountability".

Prior to World War II , there were clear, onerous, prescriptive, rigid, and binary building regulations regarding materials that could be used on the external walls of buildings. They prohibited the use of combustible materials and specified which materials could be used based on traditional use and experience.

However, after the War there were shortages of homes, of traditional non-combustible materials such as brick and stone, and of skilled builders. In 1952 the Government therefore published model building byelaws, the stated objective of which was "to allow more freedom in the use of new building materials and methods". The model byelaws did this by only prescribing the functional requirement of the building or part of the building (for example, that external walls should be "incombustible throughout"), and not prescribing, as previous byelaws had done, exactly how buildings should be constructed and what materials should be used. The functional requirements in the model byelaws were defined by reference to new fire performance tests and standards, so, for example, "incombustible" was defined by reference to British Standard fire test 476 (BS 476). New fire performance tests and standards, which allowed the use of new combustible materials such as fibreboard and plastics were therefore developed, and the old, binary building standard of combustible/non-combustible materials on the external walls of buildings was replaced with new flexible and graduated standards, classifications and small-scale tests and concepts (e.g., ‘surface spread of flame’ and ‘limited combustibility’) which allowed more flexibility, innovation, and hence the use of combustible materials.

One of these new standards was Class 0,  which was the highest national product classification for lining materials until the Grenfell tragedy (2017). Class 0 was introduced in the first National Building Regulations (1965), the change being strongly influenced by representations and lobbying of building board manufacturers who opposed regulations which prevented the use of combustible materials. Class 0 was a compromise to appease what the civil servants called the "building board interests”; that, is, the makers of building boards and their trade representative, the Fibre Building Board Development Organisation (FIDOR), who objected strongly to regulations which might reduce their trade. The compromise was to test only the spread of fire over the surface of a composite material, not the combustibility of its core, so that combustible materials like wood, and new combustible materials like fibre building boards and plastics could be used provided they were covered with a thin layer of relatively incombustible material. Had Class 0 not been introduced, the use of many new building boards and other lining materials would have been prohibited.

In 1984 there was a further shift to more flexibility and permissiveness with the introduction of performance-based building regulations which further minimised prescriptive constraints and maximised design flexibility. Instead of requiring an external wall to be built of non-combustible materials, the Building Act 1984 required external walls to “adequately resist” the spread of flame.

The development of more flexible and permissive building regulations in the UK is consistent with an international shift from prescriptive, rules-based regulations to goal- and performance-based regulation. The shift in the UK occurred a lot earlier than when it is generally accepted that the phenomenon we refer to as 'neoliberalism' began, which coincided with Thatcher’s privatisation of building control. It began during WWII and was already in full swing when Thatcher's government took it further in the Building Act 1984 which removed Class 0 and all the other technical performance standards and requirements from the building regulations (from law/statute) and put them into official non-mandatory guidance (so-called Approved Documents). This was again consistent with the international trend of taking technical rules out of the primary legislation and putting them in official but non-mandatory guidance. For example, the relevant non-mandatory statutory guidance for fire safety, Approved Document B, permitted the use of Class 0 materials on the external surfaces of buildings higher than 18m.

Hence, all that was left in the building regulations was a subjective functional requirement or goal that external walls should adequately resist the spread of flame without defining what adequate meant by reference to a particular performance standard or test.

This international trend away from centred, state controlled, prescriptive, rule or command-and-control-based regulation is an essential part of neoliberalism and the de/re-/self-regulation political project where public control and the criminal law is replaced with less onerous, more flexible types of regulation. It  leads to private individuals and companies (not Government) being responsible for more things, such as for fire safety, with  fire safety becoming a matter of personal (as opposed to State) responsibility.

The trend away from clear, prescriptive regulations and standards also coincides with the change from a manufacturing economy to a service or knowledge economy, and the rise of the professions. Clear precise prescriptive building regulations minimise the need for interpretation. Flexible, permissive, and subjective regulations and standards are vague and increase the need for interpretation and the demand for professional advice, which in turn has created a market for professional services and private standard setting companies such as the British Standards Institution ("BSI").

The inadequacy of flexible and permissive performance-based building regulation was exposed by the Grenfell tragedy (June 2017), after which Class 0 and the other British tests and standards were replaced by more onerous European standards. On 21 December 2018, the Government reverted to old-style prescriptive regulation and banned the use of combustible materials in and on the external walls of new blocks of flats, hospitals, residential care premises and student accommodation over 18 metres in height.  

Interestingly, Government did this by amending building regulation 7, rather than the ‘neoliberal way’ of publishing non-mandatory guidance. This was because there was public outrage when the Government's official review of Building Regulations, conducted by Dame Judith Hackitt, did not recommend the banning of combustible materials.

The Government's expert panel (January 2020) went further and published advice that ACM cladding (and other metal composite material cladding) with an unmodified polyethylene filler (category 3 in screening tests, tests which Government published after Grenfell) presents a significant fire hazard on residential buildings, at any height, with any form of insulation. However, Government had to withdraw this advice (31 January 2021) because flat owners couldn't sell or re-mortgage their flats as lenders required assurances that the cladding on their buildings complied with Government's advice.

A new standard was therefore introduced by the BSI, Publicly Available Specification (PAS) 9980, which adopts a less onerous “risk-based approach” and uses “risk-based benchmark criteria” which are “necessarily subjective, requiring professional judgement by competent persons in their application”. The result is that combustible material can remain on buildings below 18m so long as it is deemed to represent a tolerable fire safety risk.

PAS 9980 is another example of neoliberal regulation and is the standard to which Government requires developers to remediate the external wall construction and cladding of buildings under Government's developer remediation contract.

As after WWII, Government has had to turn to neoliberal standards and regulations again, because the post-Grenfell demand for non-combustible materials on the external walls of all buildings, irrespective of height, proved too onerous and threatened to disrupt the property market.

Neoliberal building regulations contributed to the Grenfell disaster and the subsequent building safety crisis in the UK, and they have also contributed to other building safety crises elsewhere, such as the 'leaky buildings' crisis in New Zealand. May (2004) argues that the leaky building crisis “illustrates a leaky regulatory regime” which allowed for “flexibility without adequate accountability”, and the “end result was a race to the bottom in building approval standards especially as they related to alternative designs”. Instead of using the increased flexibility afforded by performance-based regulation to innovate and improve the quality of homes, builders in NZ used this freedom to cut corners and to set lower standards which allowed for the use of untreated timber which rotted in the wet NZ climate (Dyer, 2019).

Similarly, following Grenfell, Dame Judith’s final report (p5) on building regulations said there was "a cultural issue across the sector, which can be described as a 'race to the bottom' caused either through ignorance, indifference, or because the system does not facilitate good practice".  

Dame Judith did not, however, recommend a less flexible regulatory system; instead, she recommended a new, more flexible system of regulation, a "truly outcomes-based regulatory framework" with a "risk-based approach to the level of regulatory oversight" which is "important so that the system is sufficiently flexible to allow those undertaking building work to take a case-by-case approach to delivering safe buildings". Dame Judith considered that accountability can be ensured in this flexible regulatory system by clarifying roles and responsibilities, and by improving the competence of all the actors in the system so that they can "interpret guidance and take ownership in a truly outcomes-based framework" (report p84). The Building Safety Act 2022 (BSA) has done this by introducing new roles, responsibilities, and procedures, and by introducing a new regulator, the Building Safety Regulator, and new competency requirements for registered building inspectors.

Furthermore, the Government has recently (5 January 2022) reaffirmed its commitment to performance-based building regulations rather than mandating or banning the use of any technologies. Government believes "this provides builders and developers with the flexibility to innovate and select the most practical and cost-effective solutions appropriate in any development".

The Grenfell Inquiry's Phase 2 report in 2024 will consider whether a prescriptive regime is the most effective way in which to ensure the safety of those who live and work in high-rise buildings and whether the current guidance on how to comply with the Building Regulations is sufficiently clear and reliable (Grenfell Tower Inquiry Phase 1 Report  Volume 4, October 2019, para33.8).

The new regulatory system introduced by the BSA, and new standards such as PAS 9980, will further increase flexibility, permissiveness, and subjectivity in the building regulatory system, and the need for interpretation and professional services. In other words, neoliberal regulation will continue. The question is, will the ‘race to the bottom’ continue?