Delegated Powers and Law Reform Committee
At its meeting on 3 March 2026, the Delegated Powers and Law Reform Committee considered the delegated powers in the Building Safety Levy (Scotland) Bill ("the Bill") as amended at Stage 2.
This Scottish Government Bill was introduced on 5 June 2025. The lead committee was the Finance and Public Administration Committee. As this report is after Stage 2, it is addressed to the Parliament.
The Bill makes provision for a new devolved tax, the Scottish Building Safety Levy (“the Levy”). The Policy Memorandum provides that the aim is to seek a contribution from the housebuilding sector to support the funding of the Scottish Government’s Cladding Remediation Programme. The Programme was established in response to the Grenfell Tower fire. The fire safety of cladding attached to medium and high-rise buildings has been subject to inspection and combustible cladding has been identified as in need of remediation.
On introduction, the Bill conferred 19 powers to make subordinate legislation on the Scottish Ministers.
The Committee previously considered the delegated powers in the Bill at Stage 1 at its meetings on 28 October and 11 November 2025. Thereafter it published a report on 12 November 2025. The Committee made recommendations about the powers in sections 6(1), 10(3)(b), 11(1) and 12(1). The Committee was content with the other powers in the Bill, as introduced.
The Bill completed Stage 2 on 10 February 2026. The Scottish government has lodged a Supplementary Delegated Powers Memorandum (“SDPM”) covering the powers added and amended at Stage 2.
Four delegated powers were amended and two new powers added at Stage 2.
Section 6(1): Power to modify types of buildings which may be taxable
Power conferred on: Scottish Ministers
Power exercisable by: Regulations made by Scottish statutory instrument
Parliamentary procedure: Affirmative
Revised or new power: Revised
Provision and revision
Section 6(1) confers power on the Scottish Ministers, by regulations, to add or remove to the list of cases set out in section 4(2) and section 4(3) where a building or part of a building is intended to be used as accommodation which is subject to the Levy. Section 6(1) also enables the Scottish Ministers to modify the meaning of “exempt new residential unit”. Section 5 sets out the meaning of an “exempt new residential unit” and excludes accommodation such as social housing, affordable housing and island accommodation.
Section 6(3) provides that the power in section 6(1) can modify other enactments, including the Act that will result from the Bill being passed. Section 6(4) (which was amended at Stage 2) provides for consultation with those persons that the Scottish Ministers consider appropriate before making the regulations. The power is subject to affirmative procedure.
Committee consideration
In its Stage 1 report, the Committee recommended that section 6(3) of the Bill be removed. The Committee was otherwise content with the power in section 6.
On 3 February 2026, the Minister for Public Finance wrote to the Committee to set out the Scottish Government’s plans for amending the Bill at Stage 2. In that letter the Minister stated:
Following consideration of the recommendations in your Stage 1 report published on 12 November 2025, the Scottish Government propose to make changes to the regulation-making powers in sections 6, 10 and 12 of the Bill in line with the Committee’s recommendations.
At Stage 2 the only change to the power in section 6 of the Bill was to expand the consultation requirement in section 6(4) so that before regulations could be made, the Scottish Ministers must consult:
(a) local authorities,
(b) persons whom the Scottish Ministers consider represent the interests of the residential property development sector, and
(c) such other persons as the Scottish Ministers consider appropriate.
In the SDPM, the Scottish Government indicates that this amendment is similar to others requiring consultation as recommended by the Committee at Stage 1.
Separately, in the absence of an amendment to remove section 6(3) of the Bill, the Committee wrote to the Minister for Public Finance on 24 February to seek clarity about why the Scottish Government did not bring forward an amendment to remove this section, despite the Minister’s letter of 3 February. In his response of 26 February, the Minister explains that the power in section 6(3) is necessary to maintain alignment with the UK Government’s England-only levy and that consequential amendments to other enactments may be needed to ensure consistency. The Minister indicates that without the power in section 6(3), minor definitional changes could unintentionally create misalignment across the wider legislative framework.
The Minister has not addressed why the ancillary power in section 49 of the Bill is not sufficient to make any consequential amendments to other legislation. Section 49 allows the modification of enactments, including the Bill. The Committee highlighted the ancillary power in its Stage 1 report. This remains a concern for the Committee. Section 49 is a wide stand-alone ancillary power that could address matters such as those highlighted in the Minister’s letter.
The Committee accepts that the power in section 6(3) is narrow in its terms. It can only be used when making regulations under section 6(1) and may only be used to make amendments which are related to the adjustment of the lists in sections 4(2) and 4(3), and the definition of “exempt new residential unit” in section 5.
Although the Committee did not seek a change to the consultation requirement in the Bill as introduced, it welcomes the expanded group of people and bodies who must be consulted before regulations can be made under section 6(1).
The Committee highlights to the Parliament that the Scottish Government has provided an explanation for the inclusion of the Henry VIII power in section 6(3).
The Committee notes that section 6(3) is a power to amend other enactments, that it is narrow in scope, but asks the Scottish Government to reconsider its approach.
Section 10(3)(b): Definition of financial year
Power conferred on: Scottish Ministers
Power exercisable by: Regulations made by Scottish statutory instrument
Parliamentary procedure: Negative
Revised or new power: Revised
Provision and revision
Section 10 provides for the calculation of the total Levy payable by the taxpayer. Section 10(3)(b) contains a power to set a different 12-month period as the financial year for the Levy.
This power was amended at Stage 2 by the addition of section 10(4). This requires the Scottish Ministers to consult the following persons and bodies before making regulations under section 10(3)(b):
(a) Revenue Scotland,
(b) persons whom the Scottish Ministers consider represent the interests of the residential property development sector, and
(c) such other persons as the Scottish Ministers consider appropriate
Committee consideration
This change meets a recommendation made by Committee at Stage 1 to add a consultation requirement with representatives of the housebuilding sector, Revenue Scotland, and any other persons as the Scottish Ministers consider appropriate before regulations under section 10(3)(b) are made.
The Committee welcomes the new consultation requirement in section 10(4) which meets the recommendation in its Stage 1 report.
Section 11(1): Reliefs
Power conferred on: Scottish Ministers
Power exercisable by: Regulations made by Scottish statutory instrument
Parliamentary procedure: Affirmative
Revised or new power: Revised
Provision and revision
Section 11(1) of the Bill provides a power to Scottish Ministers to make provision for and in connection with reliefs from the Levy in relation to certain building control events.
At Stage 2, the power was amended so that instead of being a discretionary power that Scottish Ministers may use, it is a mandatory requirement that Scottish Ministers must lay regulations to make provision for reliefs. New section 11(2A) requires those regulations to include relief of no less than 50% of the charge of the levy for the construction of, or conversion works creating, a new residential unit on brownfield land.
Committee consideration
At Stage 1, the Committee accepted the power in principle and the further justification for the need for the power provided by the Scottish Government in correspondence. The Committee noted that the Scottish Government would consider further limiting criteria for the power, and that this may be an issue that the lead committee would consider from a policy perspective.
The SDPM explains that the amendments commit the Scottish Government to ensure that houses built on brownfield land are not charged more than 50% of the levy.
As the power is now mandatory and additional requirements have been added to its use, the Committee finds this power acceptable in principle. The power remains subject to the affirmative procedure.
The Committee finds the power, as revised, acceptable in principle, and is content that it remains subject to the affirmative procedure.
Section 12(1): Levy-free allowance
Power conferred on: Scottish Ministers
Power exercisable by: Regulations made by Scottish statutory instrument
Parliamentary procedure: Affirmative
Revised or new power: Revised
Provision and revision
Section 12(1) of the Bill provides a power to Scottish Ministers to make provision for and in connection with a “levy-free allowance” – a quantity of building control events within a financial year which may be exempt from the Levy. The allowance is set for each individual taxpayer and is additional to any building control events that are exempted or relieved.
At Stage 2, the power was revised in a number of ways. The “levy-free allowance” must now include an allowance of 29 units, which is to be deducted from the calculation of the total levy payable by a person; the power was clarified in that it is to make further provision on the levy free allowance, and the list of matters that may be included in regulations was amended to add: “for carrying forward unused levy-free allowance from the two accounting periods or financial years preceding the accounting period or financial year”; and before making the regulations, Scottish Ministers must consult representatives of the residential property development sector and others persons they consider appropriate
Committee consideration
The amendment of the indicative list of matters that may be included in regulations to include carrying forward unused levy-free allowance is not addressed in the SDPM. However, it clarifies the power further and the Committee is content with the amendment.
The SDPM also states that the additional consultation requirement is in line with the recommendation of the Committee at Stage 1.
The Committee agrees this change meets the Committee’s recommendation in its Stage 1 report for the Scottish Government to bring forward amendments at Stage 2 to include a requirement to consult with representatives of the housebuilding sector and any other persons as the Scottish Ministers consider appropriate.
The Committee welcomes the new consultation requirement in section 12(3) which meets the recommendation in its Stage 1 report.
Section 21A: Information sharing
Power conferred on: Scottish Ministers
Power exercisable by: Regulations made by Scottish statutory instrument
Parliamentary procedure: Affirmative
Revised or new power: New power
Provision
Section 21A enables the Scottish Ministers to make regulations which would provide for the sharing of information between a relevant entity and Revenue Scotland for the purposes of administering the levy.
Section 21A(2) and (4) list the type of matters that regulations might make provision for. Section 21A(2) provides that regulations may make provision about how information is to be kept, maintained and protected; how obligations placed on relevant entities are to be enforced; appeals; penalties and compensation for failure to comply with obligations; and designation of disclosures for the purposes of the Revenue Scotland and Tax Powers Act 2014. Section 21A(4) provides that regulations may make provision for the type of information that may be disclosed; the form of such information when disclosed; the time and manner of disclosure; and the disclosure of information in bulk.
Relevant entities for the purpose of regulations under section 21A(1) are:
(a) a local authority,
(b) Registers of Scotland,
(c) the Scottish Ministers, and
(d) any other person specified in the regulations.
The Scottish Ministers must consult Revenue Scotland and any other persons that they consider appropriate before making regulations under section 21A(1).
Committee consideration
In the SDPM the Scottish Government explains that the power has been added to the Bill to provide a clear, proportionate and legally necessary statutory gateway for information sharing to support the administration of the Levy. It also narrates that the intention is to preserve a “strong taxpayer confidentiality framework that applies to devolved taxes”.
The Scottish Government explains that Revenue Scotland does not hold buildings standards and completion data which is necessary to validate self-assessed Levy returns. It is for this reason that the Scottish Government considers it necessary to have the power to query relevant entities.
The power permits the Scottish Ministers to create a process that allows for the lawful sharing of information in connection with the Levy. This will involve technical and administrative processes. The process will also need to be carefully constructed to address the confidentially duties placed on Revenue Scotland by section 15 of the Revenue Scotland and Tax Powers Act 2014.
Any regulations made by the Scottish Ministers will be subject to scrutiny by the affirmative procedure which affords the Parliament the higher form of scrutiny of regulations.
The Committee is content with the power in principle, and that it is subject to the affirmative procedure.
Section 51A: Expiry
Power conferred on: Scottish Ministers
Power exercisable by: Regulations made by Scottish statutory instrument
Parliamentary procedure: Affirmative
Revised or new power: New Power
Provision
Section 51A was added to the Bill at Stage 2. It provides for the expiry of the Act after 15 years from the commencement of section 51A.
Section 51A(2) enables the Scottish Ministers to make regulations to extend the period of 15 years. In the SDPM, the Scottish Government explains that the power has been taken so that if it was deemed necessary or appropriate regulations could extend the lifespan of the Levy. This might be the case, according to the SDPM, if the expiry after 15 years might threaten the funding of the Scottish Government’s Cladding Remediation Programme.
If the Scottish Ministers propose to make regulations under section 51A(1) such regulations would be subject to the affirmative process. They are also required to lay at the same time as the draft regulations a statement of their reasons as to why it is necessary to extend the operation of the Act.
Section 51A(4) enables regulations to modify other enactments including the Act.
Committee consideration
The new power to extend the 15-year period reflects a policy desire by the Scottish Government to have the option to extend the Levy in case at that point its expiry might impact the funding of the Cladding Remediation Programme.
The power is subject to scrutiny at the higher level by the affirmative procedure. In addition, the Scottish Ministers must also lay a statement of reasons for extending the period when they lay the draft regulations. This will provide important information for the Parliament to determine whether to approve the regulations.
In respect of section 51A(4) which enables the regulations to modify other enactments, it is not clear why the power needs to be capable of doing this. The power is restricted to extending only the 15-year period of the Bill. The power does not enable any other substantive change to the provisions of the Bill. The Scottish Government does not explain the need for the provision in section 51A(4) in its SDPM.
The Committee highlights to the Parliament that the Scottish Government has not provided a justification for the power in section 51A(4) to modify other enactments.
The Committee notes that section 51A(4) is a power to amend other enactments and draws its concerns about including it in the Bill to the Parliament's attention.