Construction Bond
Contents
The Construction Bond
On 1 April 2019 the Council issued a revised Code of Construction Practice (CoCP) replacing the original Code that was introduced in April 2016. A key change in the revised CoCP was the introduction of the Construction Bond.
The idea of the Construction Bond is that it covers the cost of any monitoring of a construction site that is carried out until the works are complete. The Construction Bond is applied to developments and construction work through the planning system. The planning officer, where the relevant planning tests are met, will attach a pre-commencement condition (ie: a condition that must be discharged prior to any construction works starting on site). The condition states:
No development shall commence until the Code of Construction Checklist and Site Construction Management Plan (SCMP) for the development have been approved in writing by the Council's Construction Management Team, and copies of the approved Checklist and Plan, and their written approval, have been submitted to the local planning authority.
Which sites are covered by the Construction Bond?
Within the [Code of Construction Practice] a site categorisation matrix is set out. This classifies a site into one of three categories, depending on the likely impact of the works on the surrounding area – such as level and character of noise from the works, duration of the project, impact on the surround road network, etc. A category 1 site is one assessed as having the highest impact, with a category 3 being the lowest. Only category 1 and 2 sites are subject to the pre-commencement planning condition.
How do I find out which category my development will be in?
The site categorisation matrix can be viewed below. You can also discuss your site with the planning department who can advise you which category your proposal is likely to fall in – they may take advice from the Construction Management Team, who you can contact directly by email on: [email protected].
Scale and nature of project
Category 1
- major development with 10 or more homes or 1,000sq m or more floorspace
- full demolition and re-construction of a property
- basement excavation or extension
- use of full-size piling rig for three months or more
Category 2
- partial demolition
- residential and commercial extensions
- minor basement extension within property curtilage - estimated volume of excavated basement material less than 50m3
Category 3
- internal refurbishment works
- cosmetic external works
How much does the Construction Bond cost?
| Scale and nature of project | Initial charge |
|---|---|
| Category 1 |
For non-domestic schemes: £17,500 including 20% VAT per year or part year of projected project length (£14,583.33 without VAT) For domestic schemes: £8,500 including 20% VAT per year or part year of projected total project length (£7083.33 without VAT) |
| Category 2 |
£5,000 including 20% VAT per year or part year of projected project length (£4166.67 without VAT) |
My development is covered by the Code of Construction Practice and Construction Bond condition - how do I discharge this?
To discharge the condition, you will need to submit two documents directly to the Council’s [Construction Management Team]: the [Site Construction Management Team (SCMP)] and [Appendix A]. Provided these documents are satisfactory, the Construction Management Team will request that you (or the person nominated to pay) are invoiced for the relevant Construction Bond fee. Once we have confirmation that the Construction Bond has been received, we will advise the planning officer that the condition has been complied with and can be discharged.
What monitoring is carried out?
The bond will cover the cost of pro-active monitoring of a range of issues: noise and hours of work; dust suppression; highways issues including the use of skips and temporary structures; management of construction traffic and deliveries, including checks on parking suspensions. The bond will not cover the cost of complaint investigation. However, should a visit by officers investigating a complaint reveal non-compliance with the Code, then this will trigger more frequent monitoring of the site which will be re-charged against the bond.
Who carries out the monitoring?
Officers from the Construction Management Team.
How often is the monitoring carried out?
An initial site visit is carried out by officers at the commencement of work. The site is given an initial rating score, depending on the compliance with the Code, which then determines the frequency of any future monitoring. This is detailed below:
| Site assessment and monitoring frequency | ||
|---|---|---|
| Score | Rating | Typical monitoring frequency |
| 1-5 | very poor | weekly |
| 6-10 | poor | fortnightly |
| 11-15 | fair | monthly |
| 16-20 | good | 3-monthly |
| 21-25 | excellent | 6-monthly |
How much does the monitoring cost?
Monitoring is charged at an hourly rate of £92 (£108.10 including VAT) for the time an officer spends monitoring/inspecting a site. The normal cost of each site monitoring visit, which typically lasts 1.5 hours including travel time and back-office administration, is £138 (£162.15 including VAT). Where an officer agrees and arranges a site visit with a developer or their representative, but the developer fails to attend (without prior notification), a fee of £38.80 will also be charged.
What happens at the end of the development?
Once we are notified that the relevant works are complete on site, we will calculate the amount of monitoring time that has taken place at the site over the course of the works and the associated cost of this. This cost will be deducted from the bond that has been paid, along with a standard processing and administration fee of £346.35.
Contacts
For further information regarding the Construction Bond, the Council’s Construction Management Team can be contacted on email at: [email protected] or tel: 020 7361 3002.
Last updated: 21 March 2024