BUDGET 2021: Irwin Mitchell calls on the Government to step up and finally settle the cladding crisis

26^th October 2021 Experts at national law firm Irwin Mitchell say the Government still needs a consistent strategy towards how it handles the “cladding crisis” and calls the Chancellor to pledge extra funds in the Budget tomorrow (Wednesday).

The Government has already announced £5 billion will be available to redress the issue so far, but experts predict this figure is needed to be three times that. Already over half of the initial £1 billion cladding remediation fund has been claimed, leading to concerns that funds will not be sufficient.

Jeremy Raj, national head of Residential Property at Irwin Mitchell, said:

“Government measures, while a step in the right direction, don’t go far enough. It is essential that the Chancellor doesn’t assume that with £5bn from the Treasury for remediation and the Residential Property Developer Tax on the horizon, the cladding and fire safety issue has been dealt with.

“If levelling up is about anything, it is about ensuring that homeowners up and down the country are treated fairly and allowed to live safely and securely in their own homes without the fear that they’ll be shouldered with much of the remediation and ‘waking watch’ costs, as they have largely been thus far, that those truly at fault are brought to account, and that funds are made available for remediation in the meantime.

“And just trying to place the burden on the developers is not the answer either. Although some of the bigger players are able to ring fence funds for this purpose, others cannot afford to and many are struggling to pursue claims against suppliers and contractors for using unsafe materials, some of whom are no longer around.

“I tend to agree with The Law Society president who said the Building Safety Bill will give leaseholders potentially ‘worthless’ new rights in pursuing developers in claims over dangerous cladding remediation. She highlighted that the cut off extension from 6 to 15 years leaves a five-year gap from some of the first uses of unsafe cladding over 20 years ago. She also noted that many developers have ceased trading and leaseholders have no recourse for claims against these companies.

“Indeed, there has been an easy – but false – assumption that the blame for all of this should be pinned entirely on developers when the root of the problem was massive regulatory failure, dangerous and unsuitable products, long complex and disjointed chains of responsibility and a system that demands the lowest possible prices at every stage. There has also been a total failure of oversight and good estate management for many buildings up and down the country which has little if nothing to do with any current developers operating in the market.”

So, what can be done? Irwin Mitchell has decided to update its ten-point plan for action with a clear roadmap on the action points the Government and residential property sector needs to consider for solving the crisis once and for all, “putting blame aside and finding a way forward. We hope to see the Chancellor go some way to addressing these issues in the Budget tomorrow.”

The ten-point plan for the cladding crisis is as follows:

The figures some leaseholders are being asked to pay for remediation works are financially crippling, unrealistic, and unjustified. They must be given up-front government funding, which they shouldn’t have to repay. Where appropriate this should be offset by future clawback from the parties deemed to have been at fault. Such liability must be determined properly through due legal process.
Access to government funding for remediation works must be made easier and faster. The fund must be significantly increased to cover all dangerous materials or defects including those discovered during remediation. We propose a minimum of £15bn. It should be available for all dangerous buildings, regardless of height, covering those under 18 m as well as those over.
The government should give freeholders a statutory right to install, maintain and charge for new systems that will help make properties safe. This includes whole-building sprinkler systems and fire alarms. We agree that these costs should be paid for by leaseholders. However, installation will reduce the need for Waking Watches and their associated costs, which typically fall on leaseholders. We should also follow the example of the Welsh government who have said they will fund fire safety surveys for all residential buildings over 11m with unsafe cladding.
Planning and building regulations must have greater cohesion and work in tandem with digital and regular on the ground oversight. These must be easily reviewed and checked. Regulations should cover safety and not just aesthetics. Online details of all at-risk buildings, relevant defects, safety features and evacuation procedures should be available to all, including potential homebuyers.
The privatisation of building control must be questioned. It needs a complete overhaul with clear, integrated lines of responsibility and best use of the technology that’s currently available. Total independence and wide powers to review and intervene where necessary are required.
Certification of safe building materials and methods must be similarly and radically overhauled, so that the failings exposed by the Grenfell Tower inquiry can never be repeated. Sub-contractors must not be allowed to substitute materials without rigorous approved procedures. Risk should not be watered down through the contractual chain to the point of no responsibility.
Special provision must be made for disabled occupants of high-risk buildings as quickly as possible. This would include easily available relevant information for fire and rescue services and tailored escape plans.
We must learn from what others are doing. The Building Information Modelling (BIM) standards that were developed in the UK have been adopted across the world. But other countries, such as Ireland, have a much more rigorous approach to regulation and enforcement. Digitised record keeping and Modern Methods of Construction must continue to be standardised.
We need to continue to increase the number of surveyors able to issue EWS1 certificates. The Fire Safety industry needs similar support. Relative costs are minor and well worth investing in. Many are trapped awaiting administrative assistance that’s keeping their lives on hold.
We must be able to look back in years to come at the Grenfell Tower disaster as a watershed moment for the industry and its regulators. It should mark the start of a new era for building standards and the safety of people in high-rise properties.