The Domestic Building Works (Consumer Protection) Bill gives the Secretary of State the power to make regulations establishing a licensing scheme for builders who carry out domestic building works in England. The scheme’s stated purposes are to protect non‑professional consumers and to promote fair competition among reputable builders.
Rather than prescribing a single model, the bill is an enabling statute: details such as who must be licensed (sole traders, partnerships, companies, primary contractors and sub‑contractors), the definition of domestic works, sanctions (including fines and licence revocation), an ombudsman, consumer compensation and membership fees are all left to secondary regulations. That design concentrates decision‑making in the executive while creating multiple regulatory levers that could significantly reshape responsibility, costs and dispute resolution in the home‑improvement market.
At a Glance
What It Does
It authorises the Secretary of State to make regulations establishing a licensing regime for businesses doing domestic building works in England, and to set offences, sanctions, an ombudsman scheme and compensation arrangements. The regulations are to be made by statutory instrument and require affirmative approval by both Houses of Parliament.
Who It Affects
Small and medium builders (including sole traders and subcontractors), consumer households commissioning domestic works, trade associations and any body that might be appointed as the licensing authority or ombudsman. Local enforcement bodies and insurers will also be affected by new compliance and claims pathways.
Why It Matters
If enacted, the bill centralises the power to define who must be licensed and how disputes and compensation are handled — potentially replacing or layering over existing private schemes and local enforcement practices. That could change margins, entry costs, and dispute resolution for a large segment of the home‑improvement economy.
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What This Bill Actually Does
At its core the bill is an enabling power: it does not itself create a licence or set rules but instructs the Secretary of State to make regulations that will. The Secretary of State will be able to design a licensing scheme that requires businesses (sole traders, partnerships and companies) that perform domestic building works to hold licences; employees are explicitly excluded from licensing.
The statutory power is broad, allowing the Secretary to decide what counts as “domestic building works” and which commercial forms must obtain licences.
The regulations may create criminal offences — for example, doing licensable work without a licence — and attach fines. They may also set licensing conditions and sanctions up to licence revocation.
On the consumer side the enabling power covers an ombudsman service to resolve disputes and the payment of compensation to household consumers; on the funding side regulations may require licensees to pay membership fees to cover administration, compensation payments and the cost of the ombudsman.Administrative structure is left flexible: the Secretary of State can appoint or establish a licensing body to run the scheme, set membership fees, and include other measures consistent with the scheme’s purposes. Because the power to implement the scheme is delegated to secondary legislation, the technical design — scope, thresholds, fee levels, evidence requirements, appeals and enforcement procedures — will be decided later, subject to the statutory instrument process and affirmative parliamentary approval.A procedural point matters in practice: the bill requires proposed regulations to be laid as a statutory instrument and approved by both Houses.
That gives Parliament an affirmative role over the detailed rules, but not a line‑by‑line shaping of them in primary legislation. Also note a drafting awkwardness: section 1 refers to England while the Act’s extent is England and Wales, which will need clarification in regulations and during implementation to avoid uncertainty about coverage in Wales.
The Five Things You Need to Know
The bill gives the Secretary of State power to make regulations establishing a licensing scheme for firms carrying out domestic building works in England.
Licensing can apply to sole traders, partnerships and companies — including primary contractors and sub‑contractors — but the regulations must not require licences for employees.
Regulations may create criminal offences and fines for carrying out licensable domestic work without a licence and may provide sanctions up to licence loss.
The Secretary of State can require an ombudsman service and consumer compensation paid from licensee membership fees to resolve disputes and reimburse household consumers.
All implementing regulations must be made by statutory instrument and receive affirmative approval from both Houses of Parliament; the Act itself extends to England and Wales.
Section-by-Section Breakdown
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Enabling power to create a licensing scheme
This subsection gives the Secretary of State the statutory power to make regulations establishing a licensing scheme for builders doing domestic works in England. Practically, it means Parliament sets the policy goal but leaves the concrete design — who is in scope, procedural safeguards and eligibility tests — to the executive. That makes the subsequent statutory instrument the critical text for industry and enforcement.
Declared purposes: consumer protection and fair competition
The bill sets two guiding purposes: protect consumers who are not professional property developers and promote fair competition among reputable builders. Those purposes will act as statutory objectives when the Secretary of State chooses the scheme’s scope, fees and sanctions, and they create a legal yardstick for judicial review if stakeholders challenge the regulations.
Scope of licensing and criminal offences
This block lists items the regulations may cover: licensing of businesses (but not employees), definition of domestic building works, mandatory licensing requirements, and offences with fines for working without a licence. The exclusion of employees is a deliberate carve‑out likely intended to avoid regulating individual tradespeople employed by licensed firms, but it raises enforcement issues where labour arrangements are fluid or misclassified.
Dispute resolution, sanctions, compensation, administration and fees
Here the bill authorises an ombudsman service, a licensing body, sanctions including loss of licence, and compensation payments to consumers, plus membership fees to fund the system. That creates an integrated regulatory and redress architecture: the licensing body would administer licences and collect fees, an ombudsman would handle consumer complaints, and compensation could be paid out of a pooled licensing fund — all design choices left to the regulations.
Procedural requirements, parliamentary scrutiny, extent and commencement
Regulations must be made by statutory instrument and are subject to the affirmative procedure — a draft must be approved by both Houses. Section 2 limits the Act’s territorial reach to England and Wales, allows commencement by regulations, and sets the Act’s short title. The combination of delegated detail and affirmative scrutiny concentrates substantive choices in secondary legislation while preserving parliamentary veto power over the final package.
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Who Benefits
- Domestic consumers (homeowners and private occupiers): the bill authorises a statutory pathway for dispute resolution and compensation via an ombudsman and licence‑funded compensation, increasing options against rogue builders.
- Reputable small and medium builders: stronger licensing and penalties for unlicensed operators can reduce unfair undercutting and boost consumer trust, potentially increasing market share for compliant firms.
- Trade associations and professional bodies: the licensing body and regulatory architecture create opportunities to shape standards, training and compliance frameworks and to participate in appeals or advisory roles.
Who Bears the Cost
- Small builders and sole traders: they face new compliance costs, licence fees and potential administrative burdens; those costs may be material for micro‑businesses with thin margins.
- Subcontractors operating informally: the requirement to licence subcontracting entities raises compliance complexity where chains of subcontracting are common and records are poor.
- Government (initial implementation): Whitehall will design, consult on and set up the licensing and redress architecture; while fees may cover ongoing costs, initial policy design and transition work will require departmental resources.
- Consumers indirectly: licence and compliance costs may be passed through in higher prices for domestic building works, at least in the short term.
Key Issues
The Core Tension
The bill seeks to protect household consumers and shore up trust in the domestic building market, but doing so via a licensing regime increases compliance costs and the risk that marginal or informal builders are pushed out of the legal market — improving consumer protection on one dimension while potentially reducing competition and pushing activity into unregulated channels on another.
The bill trades clarity of intent for administrative flexibility. By delegating almost every material choice to secondary regulations the draft lets ministers tailor scope, fees and sanctions without returning to primary legislation — efficient, but it places enormous weight on the statutory instrument and the administrative choices embedded in it.
Important implementation details are unresolved in the text: how “domestic building works” will be defined, the thresholds for who must be licensed, the evidentiary standards for breaches, and the relationship between this scheme and existing regulatory systems such as building control, Trading Standards enforcement and voluntary schemes (for example, TrustMark).
Funding and incentives create additional tensions. Requiring licensees to pay membership fees to fund administration, the ombudsman and compensation pools makes the scheme self‑financing in principle, but fee design will determine whether small operators are driven out of the formal market or whether a stable compensation fund is created.
Criminal offences and fines aimed at preventing unlicensed work are an enforcement tool but risk criminalising micro‑businesses or informal subcontracting arrangements, particularly where the boundary between an employee and an independent contractor is contested. The mismatch between Section 1’s reference to England and Section 2’s territorial extent to England and Wales also creates legal uncertainty that must be resolved before regulations are made.
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