5. Discussion of underlying causes
- While accounts of problems in the system were often attributed to concerns about capability, capacity and behaviour of both BCAs and the sector, analysis of these issues found that they were driven by several underlying factors.
- Together these drivers influence the way individuals understand and undertake their roles in the building consent system.
- Despite considerable pressure on the system and impacts on its efficiency and predictability, there is still confidence that the system is effectively achieving its intended outcome of Code-compliant building work.
- Some consideration could be given as to whether the system has the right incentives in place to ensure that roles and responsibilities are carried out appropriately and with a more balanced approach to achieving the wider objectives of the system.
5.1 The underlying causes of problems are complex
Reviewing data from the fieldwork, it is clear that there is no single underlying cause that is contributing to issues in the building consent system. Each of the themes of capacity, capability and behaviour may be linked to a web of potential underlying drivers. The underlying drivers of problems that emerged through this evaluation were commonly related to the following categories:
- unprecedented demand on the building sector
- increasing complexity in building design and regulation
- the devolved structure of the building consent system
- concerns about managing risk and liability.
These drivers influence the way that people think about and undertake their roles in the building consent system, creating impacts on the capability, capacity and behaviours of the wider building workforce. In turn, these issues contribute to problems with the way the system operates and its ability to be efficient, predictable and effective. Figure 5 below illustrates the hierarchy of issues and underlying causes found through this evaluation.
Figure 5: Hierarchy of problems in the system and their underlying causes
Text of Figure 5.
Unprecedented demand is intensifying constraints within the consent system
The building environment is often considered by those in the sector to be highly volatile, operating in a “boom-bust” cycle. This perception of instability encourages a more reactive and short-term outlook, in which the sector prioritises cost at the expense of longer-term workforce investment and development. However, this outlook may be overshadowing actual trends of ongoing demand within the sector, as illustrated through the increasing number of consents issued between 2011 and 2021.
The resulting effect of the lack of workforce investment is that both BCAs and the sector are facing challenges in keeping up with their capacity and capability needs. These shortfalls may be contributing to problems in the building consent system due to gaps in required skills and supervision to ensure that work is carried out efficiently and effectively. There are also few incentives to effectively manage poor performance due to an already stretched workforce.
Despite this level of demand and lack of workforce supply, there remains considerable uncertainty about how the sector may be impacted by the effects of COVID-19, which may be perpetuating the more restrained approach to investment in the capability and capacity of the sector.
Increasing complexity in the building environment is contributing to gaps in capability and oversight
While most residential building work in New Zealand has historically involved standalone, timber-framed structures, advancements in modern methods of construction, environmental awareness and urban densification have led to buildings becoming increasingly complex to build and regulate.
These changes, alongside pressure from market demand and drivers to increase sector productivity, have contributed to increasing specialisation in the building sector as people seek out opportunities to create greater efficiency and consistency in their work.
As a result, roles and processes are becoming increasingly siloed, with those tasked with maintaining oversight, such as BCAs, facing capacity and capability constraints when working across them. Our fieldwork suggests that both the industry and the BCAs are facing challenges in keeping up with the capability and capacity to manage the increasingly complex nature of modern construction and its regulatory requirements.
The structure of the building consent system is contributing to unpredictability
The building consent system requires that each BCA has their own policies and procedures in place to manage the process of determining reasonable grounds for issuing a building consent. This is set out in Regulation 7 of the Building (Accreditation of Building Consent Authorities) Regulations 2006. The decentralised nature of the system means that there are 67 different BCAs, each responsible for their own policies and resourcing.
The process analysis found that there are only minor differences between BCAs when looking at the processes for application lodgement, building inspection and issuing of certificates of code compliance. However, both BCAs and sector professionals acknowledged that there were variations in the way that decisions were made at each stage in the process. These variations were often as a result of different interpretations of requirements, use of different IT systems for managing documentation, and competing priorities impacting on their resourcing capacity.
This variability in processing contributed to a sense of uncertainty and unpredictability for sector professionals. BCAs also described challenges in managing their own capacity and capability, with smaller BCAs often facing more difficulty than larger BCAs in accessing the resources and expertise to carry out their role efficiently and effectively.
Concerns about potential risk and liability are affecting the way that people carry out their roles in the system
The way that risk is managed within the building consent system is seen as one of the more significant drivers of behaviours that contribute to problems within the system and was a key focus of stakeholder feedback throughout the fieldwork.
The Building Act 2004 sets out the responsibilities of those working within the consenting system, including owners, designers, builders and BCAs. Each of these hold responsibilities for ensuring that building work complies with the Building Code. BCAs are responsible for checking this work and making decisions to grant consents on reasonable grounds. BCAs also have a duty of care to carry out their consenting function with reasonable care to ensure compliance with Building Act requirements.
Where building work has been found to be defective, both BCAs and sector professionals may find themselves the subject of claims that could result in financial liabilities should they be found to have been negligent in carrying out their responsibilities.
BCAs are perceived by many in the sector as being risk-averse because it is part of their duty of care and responsibility under the Building Act to carry out their consenting functions with reasonable care and skill. This is seen as an effort to mitigate against potential future risk, likely in response to the considerable financial liabilities they faced for legacy weathertightness issues.
This perception of BCA risk-aversion, alongside concerns about potential liability, appears to be influencing the way that people carry out their role in the consenting process, particularly with regard to quality assurance.
5.2 These issues are putting considerable pressure on the system
This evaluation found that multiple factors are contributing to issues with capacity, capability and behaviour of BCAs and sector professionals. In turn, these underlying drivers often interact with each other, compounding their impacts on the building consent system.
The BCA and sector workforce is experiencing widespread capacity constraints that are limiting their ability to carry out their roles as efficiently and effectively as they could be. While current levels of demand should support and encourage growth in workforce capacity, both BCAs and the sector face challenges with ensuring that they have the right people to carry out work within the consent system.
Limited capacity is restricting the ability to sufficiently monitor and build workforce competence in an increasingly complex building environment, leading to concerns about the skills of both BCAs and sector professionals.
This is putting considerable pressure on BCAs, who are ultimately responsible for providing assurance that building work is designed and carried out in line with the Building Code. The current settings, alongside the significant capacity and capability constraints, do not appear to be providing sufficient incentive to ensure that roles and responsibilities are being carried out consistently and appropriately, particularly when it comes to quality assurance.
This lack of consistent quality assurance only reinforces the need for BCAs to be more concerned about the potential for risk if they do not undertake their role with the appropriate level of caution, regardless of the quality of work the sector produces. As BCAs become very cautious in their approach to decision-making, issuing high numbers of RFIs to meet their thresholds for determining “reasonable grounds” this, in turn, disincentivises the sector from putting in sufficient effort up front. As a result, the system may benefit from some consideration of how to better balance responsibilities in the assurance process.
5.3 Despite its problems, there is confidence that the system is delivering compliant building work
Although there is evidence that the system is not operating as efficiently or predictably as it could be, there was still a high degree of confidence from both BCAs and the sector that the system is effectively delivering buildings that are compliant with the Building Code.
This demonstrates that although the process is often frustrating due to the many issues impacting on its operation, it is still leading to good outcomes and ultimately, delivering Code-compliant building work. However, it’s also important to consider that any changes to improve the efficiency and predictability of the system should not come at the expense of the strength in decision-making that currently exists in the system.
In addition, efforts to address the issues with capacity, capability and behaviour in the system should also be mindful of the various underlying causes of these problems. Further consideration could be given to balancing the roles and responsibilities in the system, particularly with regard to quality assurance. This could contribute to a system that is more efficient, predictable and effective, and better able to achieve its wider objectives.
5.4 Further research would help address ongoing evidence gaps
The fieldwork for this evaluation included data from a range of sources, including interviews, surveys and a review of existing research. While some information gaps have been identified from the outset, this evaluation has also found opportunities where further data collection might improve understanding of how well the building consent system is operating.
The system would benefit from regular collection and monitoring of building consent data across all BCAs, including the time taken to process applications, the number of consents granted that transition to completed buildings, and details about RFIs and inspections. This could help to improve understanding of the efficiency and consistency of the system while also identifying potential capability issues that may be contributing to RFIs or inspection failures. MBIE is currently working together with Stats NZ to explore potential improvements to the way that building consent data is collected and used.
Data on building stock and any improvements or alterations could help to better understand the effectiveness of the building consent system and standards for building work. Better evidence about the outcomes of building work could also increase confidence in decision-making within the consent system.