A new mandatory licensing scheme for all UK construction companies is to be developed in a bid to improve the trustworthiness of the sector.

The scheme, “to transform the sector into a high quality and professional industry”, will be led by a new Construction Licensing Task Force.

While several elements of the plan are yet to be developed, a spokesperson for the Federation of Master Builders (FMB) which announced the scheme,  has said that unlicensed companies would not be able to complete work for a customer.

All construction companies would be required to be licensed, regardless of size.

It has also been suggested that the scheme might be enforced partly by homeowners making checks on which companies they use, and by insurance companies, who would need to check the licence of a company before granting them a warranty.

Licence holders may have to undergo financial checks, abide by county court judgements, and comply with a code of conduct.

The FMB said the justification for the need for the scheme is due to findings such as that 32 per cent of homeowners are put off doing major improvement works because they fear hiring a dodgy builder.

This means that the UK economy could be missing out on £10 billion of construction activity per year because of anxiety over rogue building firms.

Furthermore, 55 per cent of people who commission home improvement work have had a negative experience with their builder.

The taskforce will be chaired by former British Property Federation CEO Liz Peace.

FMB chief executive of the FMB Brian Berry said: “It’s unacceptable that more than half of consumers have had a negative experience with their builder.

“However, we shouldn’t be surprised by this given that in the UK, it is perfectly legal for anyone to set up a building firm and start selling their services without any prior experience or qualifications. This cannot be right given the nature of the work and the potential health and safety risks when something goes wrong.”

Ms Peace said: “Mandatory licensing has the potential to transform our industry into a world-leading sector. Licensing will help drive up standards and help address the issue of quality and professionalism, which is some areas, is falling short.

“At the heart of what we’re trying to do is increase protection for the ordinary person who engages with the construction sector.”