Blog: Umbrella Schemes

Ben

Author: Ben Howe, MCS Compliance and Enforcement Manager

Umbrella Schemes

MCS is committed to helping develop the growth of the low carbon technology sector. We are actively supporting this by helping to deliver installer training courses around the country, including upskilling installers who may be considering renewable technologies after what may be years of installing traditional fossil-fuel heating systems.

But this can be challenging, especially for some technologies, such as biomass and heat pumps, where system design is critical. For tradespeople who have been installing gas or oil boilers, they may perceive this capability as a barrier to achieving MCS certification themselves. However, entering the industry under an Umbrella Scheme may be a viable route for some. Ultimately and in time, they may seek MCS certification themselves.

What is an Umbrella Scheme?

Umbrella schemes are not a new concept, this type of business model has been used in other industries for years. A term we have seen increasingly being applied is MCS Umbrella Scheme, which is particularly associated with the heat pump industry. We have seen MCS Contractors advertising such offerings using this term on their websites. However, MCS does not recognise a specific category of MCS-certified contractor in this regard. But such arrangements can be compliant with MCS requirements if they are properly structured and managed.

From an MCS compliance perspective, this term describes a contractual arrangement whereby, rather than directly employing its own personnel, an MCS Contractor appoints a network of subcontractors, each of which undertakes a specified scope of work on behalf of the MCS Contractor. That scope of work may include site survey and sales activity, installation, commissioning, or a combination of these activities. Under this arrangement, the MCS Contractor effectively becomes an Umbrella Scheme Operator.

How does an Umbrella Scheme Operator meet MCS requirements?

Ultimately the Umbrella Scheme Operator is responsible for the full scope of work carried out, not the subcontractors. This is a crucially important principle. It is important that consumers understand which entity is contractually responsible for delivering their MCS compliant installation.

The key clause in MCS 001-1 (issue 4.2) for Scheme Operators meeting compliance is clause 4.11. They shall be thoroughly familiar with the requirements under this clause which, in brief, are:

• Have a formal written agreement with your subcontractors which clearly sets out the scope of work the subcontractor is undertaking, and the standards expected.
• Ensure the subcontractor is demonstrably competent for the work they are undertaking.
• Ensure the subcontractor has appropriate insurance.
• Ensure all the subcontractors’ personnel receive relevant training.
• Supervise and assess the work undertaken by subcontractors (see clause 4.11.3, b).
• Assume full responsibility for the installation at handover – MCS certificates are raised by the umbrella operator only.

As with all MCS installations, the consumer should hold a contract directly with the MCS Contractor for all the necessary tasks involved to deliver a compliant installation, including the design, supply of the main system components, installation, and commissioning. The contract should never be between the customer and a subcontractor for any of these tasks. This has always been a fundamental scheme requirement, as described by clause 4.10.1, MCS 001-1.

What are the consequences for Umbrella Scheme Operators failing to manage their subcontractors?

For scheme operators who fail to manage their subcontractors, they could incur the cost of remedial work to make all installations compliant. They also run the risk of losing their certification altogether, and consequently, all subcontractors could lose their work. This could prove very costly for all involved.