Smaller builders expected to be hit hardest in new wave of inquiries as OFT continues hunt for industry cartels

The Office of Fair Trading is preparing a wave of investigations into the housing repair and maintenance sector, Building understands.

It is believed that the OFT, which has carried out raids on cartels in the roofing industry, is now preparing to swoop on the smaller builders involved in repair and maintenance. It is likely to clamp down on VAT fraud and cowboy builders, in addition to investigating the possibility of cartels.

The OFT is understood to be working alongside trading standards authorities and Trustmark, the government-backed regulatory body for the domestic building sector, to clean up the repair and maintenance industry.

The news of possible OFT investigations emerged as the body confirmed its strategic plan for 2006/07, which again lists construction as one of its five key sectors.

The strategy document states that the OFT's work in construction will follow three routes. These are: inputs to construction, which covers building work and supplies; the supply of commercial and domestic buildings; and services related to housing. Investigations into the repair and maintenance sector would come under the last category.

Construction is a priority area, particularly cartel behaviour

OFT spokesperson

As part of its strategic plan, the OFT has also promised to publish a summary of its work in construction before next April.

An OFT spokesperson said: "We have construction as a priority area, particularly in terms of looking at cartel behaviour. We do not comment on the specific areas we are looking at."

The Federation of Master Builders said it supported the efforts of the OFT to address unfair competition in the sector, but blamed the government for its VAT policy on home repair and improvement work.

Tom Dibaja, FMB external affairs manager, said: "The OFT faces an uphill battle because of the government's refusal to protect homeowners from shoddy work by cutting the VAT on repairs."