The UK government has launched a new campaign against corrupt tradespeople. This has been accomplished by implementing a payments system designed to give homeowners more protection, as well as an authorised code of conduct for home renovation businesses.
According to Prime Minister Andy Burnham, “cowboy builders out of business” is the goal of the measures. This comes after the government brought attention to the problems that residents face when construction projects fail. Numerous complaints regarding incomplete construction and poor craftsmanship have been made, costing homeowners money. By providing additional options for choosing ethical dealers, it is believed that the new policies would contribute to the restoration of confidence.
What’s Actually Changing
Businesses are going to be able to register under the recently implemented Approved Code in order to set greater standards for things like customer service, transparency, and dispute resolution. The code should be fully operational by December 2026, with the first enrolments under this system anticipated starting at the end of September.
Owners are expected to be able to make payments based on the progress accomplished during the building phase thanks to another service called Trusted Payments. This implies that before beginning any work, builders won’t have to accept lump sum payments from clients. This service is anticipated to help over 100,000 merchants. Participation in the authorised code is entirely optional. This means that this system is aimed at assisting people to recognise trusted traders as opposed to introducing licensing systems for all builders. The Furniture and Home Improvement Ombudsman’s opinions are being taken into consideration while drafting the code. Instead of enforcing new rules on all businesses, this strategy places an emphasis on safety precautions.
Why “Cowboy Builders” Isn’t the Whole Story
According to the government, there is a real problem with consumer protection in the home renovation sector. Over 25% of customers who completed any home renovations in the previous 18 months reported problems, including situations in which contractors just vanished after receiving advance payments. The government also cited a survey that found that over 30% of customers who had issues spent an additional £750 on average.
The government has also cited a report done for the Competition and Markets Authority that projected £10.3 billion in damage to consumers from home and garden care services in 2024, including losses, overpricing, and unfair business practices.
Rather than focusing only on the money lost to cowboy builders, this £10.3 billion figure was related to the entire financial consequences of any issues in the business. For this reason, the government wants to provide homeowners with more safety. However, rather than focusing on the building sector as a whole, these actions are intended to target rogue companies. The great majority of builders retain a positive reputation and construct to a professional standard. Payment agreements can also prevent disagreements from developing over time.
The Practical Gaps Worth Watching
Since the approved code is voluntary, traders who do not wish to participate are free to exclude themselves from it. There have been worries about whether the scheme will be effective in dealing with dishonest traders who are not part of it. However, for companies that already follow high standards, joining the scheme could serve as an additional way to demonstrate their commitment.
The success of the scheme ultimately relies on how widely it is adopted by consumers and how it is used when selecting a trader. Existing trusted trader schemes already help some consumers find reliable businesses. The growing demand from consumers for the new code can eventually encourage more companies to join.
What This Means for Construction Businesses
In the case of construction companies and self-employed contractors, the immediate emphasis is most probably on getting to know how the new payment process works and whether it is worth becoming a member of the Approved Code. Payments based on milestones can also affect how businesses deal with project payments and cash flows, especially if work is done in phases.
Businesses are recommended to maintain accurate accounting records regarding work agreed, project milestones, changes, invoices, and payments. Good accounting becomes very important when money comes in instalments rather than a lump sum. Becoming a member of the scheme does not automatically affect a company’s VAT, tax or insurance status.
| Aspect | Detail |
|---|---|
| Scheme name | Approved Code / Trusted Payments |
| Launch | First businesses expected by the end of September 2026; full implementation by December 2026 |
| Participation | Voluntary for tradespeople |
| Consumer protection | Payments can be held and released against agreed project milestones |
| Dispute resolution | Standards include dispute resolution, with the scheme developed alongside the Furniture and Home Improvement Ombudsman |
| Trader access | More than 100,000 traders expected to have access to the payment system |
In addition to this, the government is also implementing additional legislation for private bailiffs in England and Wales, which includes the requirement for accreditation by the Enforcement Conduct Board. These provisions, however, are separate from those of the home improvements scheme. These bailiff provisions are specific to England and Wales, and they have no bearing on the construction measures. It is important that businesses view these changes as separate from each other.
A Fairer Framing Going Forward
The government is taking action based on a legitimate consumer protection concern. In excess of one-quarter of those who had done work on their homes in recent times had experienced difficulties, and the government itself pointed to consumer harm of around £10.3bn in the home and garden maintenance sector in 2024. However, the clampdown cannot be regarded as a condemnation of the construction sector as a whole.
The Approved Code and milestone payment scheme could provide consumers with better protection and help legitimate companies prove their credibility at the same time. The key issue is whether there will be enough participants on both sides for this scheme to serve its purpose against the rogues it is intended to fight. Strict implementation of the current legislation remains an important component in customer protection. Legitimate companies that can implement the code from the very beginning can have an obvious competitive advantage over others.
