Building Safety Act 2022 phase 2: cost benefit model report of building safety regime in Wales

On 6 January, 2026 the Welsh Government published its report Building Safety Act 2022 Phase 2 – Design and Construction Stage – Impact Assessment – Cost-Benefit Model Report: The results of an assessment of the costs of the proposed policy option for the design and construction stage of the new building safety regime in Wales. The report was prepared by Adroit Economics for and on behalf of Welsh Government.

The report presents an economic impact assessment of proposed reforms to the building safety regime in Wales during the design and construction phase, estimating the additional compliance costs and expected benefits compared with the current regulatory framework. The analysis focusses on two policy scenarios: continuing business as usual and implementing a new regime that introduces enhanced building control for higher-risk buildings (HRBs) and dutyholder requirements for all other buildings undergoing work.

The buildings in scope are defined as HRBs residential structures over 18 metres or seven storeys and certain care facilities and non-higher risk buildings, covering both domestic and non-domestic construction activity. The assessment uses a ten-year appraisal for costs and a 70-year period for benefits, with a start year of 2027 and costs expressed in 2023 prices, and assumes full implementation from Year 1.

For HRBs, additional requirements examined include gateway approvals at key stages of construction, enhanced dutyholder responsibilities, resident engagement, creation and maintenance of a golden thread of safety information, mandatory reporting, sanctions and enforcement, and familiarisation activities. For non-HRBs, the focus is on dutyholder requirements and familiarisation costs.

The costs considered are principally the additional time and expenditures needed to fulfil these requirements, affecting industry (clients, principal designers, contractors) and public bodies (the Welsh Government, local authority building control, and Fire and Rescue authorities). Sensitivity analysis across low, central, and high scenarios reflects uncertainty in certain assumptions.

The quantified results indicate that, over ten years, the proposed regime imposes significant compliance costs for example, tens of millions of pounds in present value terms for industry duties and familiarisation on non-HRB work, alongside smaller but meaningful costs for regulators and HRBs. Expected benefits include stronger oversight of construction, clearer accountability, and enhanced safety outcomes through reduced fire risk and structural incidents, potentially avoiding substantial remediation and rework costs.

While monetised benefits for HRBs are estimated in the report, the analysis for non-HRBs uses a “switching value” approach to estimate the reduction in rework needed for benefits to match costs. Additionally, non-monetised benefits include improved resident safety and confidence in building quality.

The full report can be downloaded here

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