It is four years since the Grenfell fire. A tragedy born out of systemic failure around fire safety and building regulations has morphed into a seeming inability to deal with the fallout, and to protect the people least at fault.
The government’s headline figures that more than 90 per cent of about 470 high-rise buildings have completed or started remediation work to remove unsafe aluminium-composite material (ACM) cladding barely tells half the story.
Even in this most obvious area — tackling the cladding at fault in Grenfell on buildings higher than 18m — only 64 per cent of private sector buildings have had their cladding removed. (The public sector is further advanced.)
This has long mushroomed beyond ACM though. It is nearly three years since the government advised building owners to look for other types of cladding, particularly what is known as HPL.
It is a year-and-a-half since an industry-led attempt to give comfort to lenders through inspections of buildings’ cladding, insulation and firebreaks, the EWS1 form. But a shortage of qualified surveyors and failure rates of 90 per cent have trapped millions in unsellable, unmortgageable homes, exposing a raft of non-cladding issues and gumming up the market.
The question of “who pays?” has dominated the headlines — and rightly so, given the failure to live up to the principle that leaseholders shouldn’t foot the bill. But the UK is debating who should bear the cost of the problem without adequately defining what the problem actually is.
What’s needed is an independent audit to look at which buildings are affected and to assess the repairs needed. This isn’t quick or easy. But it could, as was seen in Australia, enable a risk-based approach to remediation work. That in turn could ensure that work happens where it is most needed, in a sector beset by skills shortages and with six-month lead times on key products.
Instead, it’s not clear how big the issue is or what fixing it might cost. (The best available guess puts the universe of residential buildings higher than 11m at nearly 90,000, half of which are in the private sector and two-thirds are assumed to have cladding).
An understandable tendency towards risk aversion by inspectors, and some inherent conflicts of interest in the leaseholder system, mean residents are being presented with huge bills for work they are not sure is really needed.
Meanwhile, the government’s £5.1bn building safety fund, and the rightly panned loan scheme for buildings 11m-18m tall, only cover cladding. The housing select committee has estimated that the cost of full remediation works could be up to £15bn.
The housebuilding industry is being asked to stump up £2bn through a new tax over 10 years to remedy cladding, even as the issue continues to grow.
The listed sector reckons it built less than 20 per cent of the buildings higher than 18m (and some won’t have built any). But the government’s broader principle is reasonable. About a dozen companies account for more than 60 per cent of new homes built annually and have an interest in the sound functioning of the market. They have benefited from plenty of government largesse in supporting house prices; the proposed tax is at worst 5 per cent of net earnings for the listed sector, says Liberum.
Again a policy-first, details-second approach has unintended consequences. While the sector has committed about £500m to remediating its buildings, according to the industry body, that belies a wide range of views about housebuilders’ responsibilities — something ESG teams are, and should be, considering.
The sector is alive with talk about who has downed tools or delayed remediation plans since the tax was proposed in February. And in that light, industry bleating about “paying twice” has some merit.
It would be perverse if the more enlightened, who have done more to rectify failings with old buildings, were penalised compared with those that sat on their hands. The government could usefully do some of the levelling up it is so keen on between the leaders and laggards, distinguishing between the responsibility to remediate buildings constructed and the contribution to fixing the system overall.
That case is easier to make, however, with a proper understanding of what went wrong, where and how it must be fixed.