In 2017, a fire broke out in the 24 storey Grenfell Tower in London. Within minutes the fire spread up the exterior of the building and within two hours every floor was alight. The fire caused the death of 72 people, and has become one of the UK’s worst modern disasters.

The fast spread of the fire was unexpected. In the wake of the disaster, experts looked to understand the cause of this rapid spread. Evidence pointed to the addition of ACM external cladding as part of a renovation project on the building.

The Hackitt Report

Following the fire, a report examined building regulations and fire safety. As a result, in 2018, Dame Judith Hackitt published her report Building a Safer Future. The report highlighted the failures of a fragmented construction industry.

Hackitt criticised building regulations for being unclear and complex.  She set out recommendations for an overhaul of the building control regulations. It called for simplification and streamlining of the building control regulation.

The report also highlighted the need for a culture change in the industry. It noted the failure of the industry to recognise itself as a service industry – building for the end user. The report calls for changes to the way projects are procured to create ‘safer building outcomes’ and challenges the industry to move away from a lowest price tendering model which focuses on cost rather than quality or safety.

Building safety fund

Recently, the UK government announced the launch of a new £5.1 billion fund to fix dangerous cladding on tall buildings. There are over 12,000 residential buildings over 18m tall in the UK. 1,700 of these potentially need remediation works to the cladding. The fund covers those where the fire safety risk to life is unacceptably high.

What will it cover?

The government will fully fund the cost for replacing unsafe cladding on residential buildings over 18m tall. For any buildings between 11m – 18m tall, a new loan system will cover the cost. This will pay for the removal through a long term, government backed low interest loan agreement. However, there is little detail on how this loan scheme would work at present.

The fund is specifically to cover works to remove cladding. It will not cover any other fire safety work that the building needs. This could include works to balconies, sprinkler systems or fire exits.  These costs will need coverage by developers or leaseholders We may see difficulties ascertaining where cladding works stop and other remedial work begins, leading to the risk of disputes or uncertainty of costs. Where the costs will be passed down to leaseholders, this could make their properties unsellable.

Where will the money come from?

The government will cover the cost for buildings over 18m tall. For those who fit into the criteria to receive the loan, repayment will be covered for the leaseholder. However, there is a cap for costs, at £50 per month per leaseholder.

The government is planning to recoup some of the money from developers through a new tax on on housebuilders from 2022 which it says will raise £2bn over 10 years. Separately, it plans to introduce a ‘Gateway 2’ levy when developers seek planning permission to build high-rises in England. Currently details of this new levy are scarce, with a consultation paper due for publication at some point. Whilst most agree the need to avoid passing costs should to the leaseholder, a blanket approach to any levy could stifle investment in high-rise buildings going forward.

Should you require assistance in the costing or valuation of works relating to the bill or as a result of recent changes, we may be able to assist. Contact us today and we will be happy to help if we can.