Security for Private Road Works (Scotland) Regulations 1985 (Hansard, 19 December 1985)

§ Lord Gray of Contin
My Lords, I beg to move that the Security for Private Road Works (Scotland) Regulations 1985, a copy of which was laid before your Lordships' House on 26th November, be approved.
These regulations will have the effect of protecting house buyers from the danger of finding that a road which has been paid for in the house price has not been provided because the developer has gone bankrupt or has defaulted in some way. They provide that, prior to starting construction of private house development which includes new roads, developers will have to lodge a security with the local roads authority to cover the cost of these roads. Should the developer then fail to construct or complete a road, the authority will be required to do the work and may utilise the security for that purpose.
The provisions under which these regulations are made were generally welcomed when the Roads (Scotland) Bill was before this House. Comments made by the noble Lord, Lord Carmichael of Kelvingrove, on behalf of the building trade about keeping the bond to the minimum necessary have been taken into account. I may say that all parties who have been included in the working group are in agreement on the regulations, I beg to move.

§ Lord Carmichael of Kelvingrove
My Lords, I thank the noble Minister for explaining the order. He will realise that when I saw on the Order Paper a reference to Scottish roads I rather groaned because we had spent so long on it. However, on examination I found that it was fulfilling a promise made during the long Committee stage of that Bill. It is something which will be of great help to people in Scotland, where there are very many examples of unfinished roads and people having great inconvenience in getting to their houses, for which they have paid a great deal of money they also having paid for the road.
There is one point about which I want to ask the noble Lord. The working party examined this matter, and while we were all anxious that the sum he made as low as possible I hope we can have an assurance that the sum will be a realistic sum, so that even allowing for perhaps a prolonged building period, which sometimes happens, and even for a long period of bankruptcy while it was going through the courts, the householder who had already paid would not be disadvantaged because of it. Otherwise, in the spirit of Christmas and New Year's Day, I should like to wish God speed to this order.

§ Lord Gray of Contin
My Lords, I am grateful to the noble Lord, Lord Carmichael, for his words and for the welcome he has given to this order. I think I can assure him on the point he raised. Provision is made to ensure that the security will be enough to cover the cost of constructing the road to a satisfactory standard, 915 and that the sum will be based on the estimated cost of all remaining work required to complete the road in accordance with the construction consent. In calculating the amount of security required—and this is the point about which the noble Lord was concerned—the local roads authority may allow for increasing costs arising from, say, inflation, since the bond must be capable of covering the cost of completing the road at any time during the validity of the construction consent, which runs for a minimum period of three years or such longer time as the local authority roads department may specify in the consent (Section 21(4) of the Act).
In the event of a dispute between the authority and the developer over the amount of security required, Section 17(4) makes provision for arbitration on that and on any other matter arising from the regulations. But we believe that in practical terms the experience of the local authority roads department will be such as to ensure that an adequate sum is set aside for the various contingencies, such as, as the noble Lord suggests, a prolonged period due to bankruptcy. The point that the noble Lord is concerned about is well covered in the regulations. I hope that will satisfy him. Perhaps I may reciprocate his good wishes for the festive season.