RESOLVING THE
BUILDING SAFETY AND CLADDING CRISIS ASFP Technical & Regulatory Affairs Officer Niall Rowan reviews the latest Government announcements on building safety and discusses their implications for the construction industry. Since the start of the year there has been a raft of new announcements from the Department for Levelling Up, Housing and Communities (DLUHC) on building safety and the cladding crisis. In particular, these have focused on how and who should pay for remedial actions needed to make buildings safe. Initially, in January, announcements were made in relation to making developers pay for defective buildings, with subsequent declarations in February and March. Letter from the Secretary of State - 1 Michael Gove’s 10th January letter to developers stated: “I am now offering … open and transparent negotiations to agree a settlement that will restore confidence and ensure the industry that caused the problem pays to fix it… you should: 1. Agree to make financial contributions this year and in subsequent years to a dedicated fund to cover the full outstanding cost to remediate unsafe cladding on 11-18m buildings, estimated currently to be £4bn; 2. Fund and undertake all necessary remediation of buildings over 11m that you have played a role in developing (i.e. both 11-18m and 18m+). Any work undertaken by developers themselves on 11-18m buildings will reduce the total cost of cladding remediation that has to be paid for through the proposed 11-18m fund...” Quite how these discussions and deliberations will be made is not clear. How many buildings? How many developers? Should all developers pay, or just those that installed defective cladding? (See ‘The elephant in the room’ red box on page 26). How much should each developer pay, and how should that be decided and so on. In a later letter from Richard Goodman Director-General – Safer and Greener Buildings, he asks of developers: “I would be grateful if you could start creating a fuller return with all 11m+ buildings that you have developed so that we can match these against our database of buildings that need remediation where we do not have developer information.” What happens if you simply don’t reply, or state ‘no buildings over 11m’? How do they check? How is this going to be audited? He goes on: “We wish to ensure that those developers who are committed to making a full contribution do so... We envisage that those who meet these commitments will be recognised as the responsible actors in this market.” Fine words, but unless you get everyone involved, then not many will volunteer to pay ‘a fine’ determined by civil servants for something that they consider was not illegal. If this is not a can of worms, I don’t know what is and as you might expect, several prominent developers have already stated that they had done nothing wrong because they installed products in good faith believing they met the regulations as described in Approved Document B to the Building Regulations (AD-B). I see court cases looming. 24
Redrow chief executive Matthew Pratt became the first to comment, branding Gove’s threats “unrealistic” and “inequitable”. Pratt said: “I don’t think anyone can sign a deal that says ‘you will give me anything I want’. Which basically [is saying that at] the end of the year ‘we’ll tell you how much it [the cost] is and you’ll sign up to say you’ll give us it.’ Nobody can sign up to that, it’s unrealistic.” In a similar move, a letter from the chief executive of housebuilder Persimmon to the DLUHC called the sanctions “unlawful”. So was this stalemate 1? Letter from the Secretary of State - 2 In order to cover all the bases, Gove also criticised the construction products industry with a letter to them, stating: “There are a number of cladding and insulation companies whose products or services have contributed to the need for remediation of 11m+ buildings on fire safety grounds. I am offering a window of opportunity, between now and March, for the sector to work with my department through open and transparent negotiations to agree a settlement that will restore confidence and secure an appropriate contribution from the sector.” This approach was similar to that used for the developers, and a lot of the same arguments apply. Who will pay, and how much for each manufacturer? Will Kingspan only pay 15% and Celotex pay 85% on the basis of the respective uses of their products on Grenfell? How much will Arconic pay for the cladding? What about other buildings and other fires? What time period are we talking about? Why should manufacturers pay out and not contractors? Or the architects who designed it? Or building control who approved it? It looks like an unworkable mess of claim and counter claim and blame/liability deflection. CPA discussions So far, the Construction Products Association (CPA) has responded positively and weekly meetings have been undertaken with Gove’s team at DLUCH. DLUCH originally had a hit list of around 70 organisations – mostly those who were associated with Grenfell, including architects and engineers, as well a product manufacturers and developers. But as indicated above, while there is a desire to get those involved to pay, and to be fair, some goodwill from some of those parties to contribute, it would be hard to charge a relatively tiny portion of the construction industry for faults at Grenfell, when there have been fairly widespread failings across the industry. Whatever, the Government has the wind at its back and as one CPA representative said to me, “Gove has the leverage to whack us!” There is also a strong sentiment in Westminster that ‘Construction must pay’. So is this stalemate 2? Question: If he gets the money from the developers will the manufacturers get off scot-free? Or vice versa? How will the balance be struck?
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