UK Government Approach to Building Safety
This week we will be producing and delivering specific advice to our Registered Providers and Building owner clients on what this means for them and the change in direction by the government to a risk based Appraisal and assessment.
Rt Hon Michael Gove revealed a 4-point plan to reset the government’s approach:
This is our response to Rt Hon Michael Gove's LETTER
#1 Opening up the next phase of the Building Safety Fund to drive forward taking dangerous cladding off high-rise buildings, prioritising the government’s £5.1 billion funding on the highest risk
There is no definition of cladding other than “unsafe cladding” in Mr Gove’s letter to the developer industry. Nor is there a definition of “highest risk” (this may be PAS 9980). There are still significant costs attached to other combustible elements in EW’s and defective passive fire protection.
It is also clear that the £5.1bn set aside may meet the “cladding” cost now the Consolidated Advice note has been withdrawn. This should not be confused with the current cost to remediate the estimated 5000 buildings over 18m and 35,000 buildings 11-18m which will be significantly more albeit with lower risk levels
#2 Those at fault will be held properly to account: a new team is being established to pursue and expose companies at fault, making them fix the buildings they built and face commercial consequences if they refuse
This will be an interesting approach of which there are no details at present. The letter to the industry refers to bodies “who have played a role in developing” this we suspect has a wide interpretation not only implying developers but consultants, contractors and in some cases building owners who commissioned the work. (this may draw in combined liability or at least muddy the waters)
There is no response to the announcement by the insurance industry. We suspect that Insurers current approach (which has been to withdraw cover for cladding including retrospective claims) will continue. Furthermore, a preclusion to claims beyond the usual 12/6 years can also be anticipated.
Legal recovery against developers or contractors who are now un-insured for such claims will only succeed against large developers with “deeper pockets”
Mr Gove has also asked the industry to provide information on all buildings they have been involved in for the last 30 years. Most organisations dispose of documents after any contractual obligation. It surely must be the Building Owners obligation to have this and where they have lost it (as is often the case) replace it by due diligence surveys.
#3 Restoring common sense to building assessments: indemnifying building assessors from being sued; and withdrawing the old, misinterpreted government advice that prompted too many buildings being declared as unsafe;
We fully support this the common sense approach and would actually say that the government advice has not been misinterpreted it has been followed to avoid claims of negligence. The widespread issue of B2 notifications with recommendations for full remediations must be laid at the door of the Government. The Consolidated Advice Note (CAN) has been withdrawn to ensure that it is not used to justify "disproportionate assessments". However it is being replaced by a Risk based assessment process (PAS 9980) which, in its draft form starts from the point of the building being a High risk with a risk based process to justify a lower risk. It also does not guide assessors to any particular clear conclusion, however given that the government is providing an indemnity policy for these assessors to make an assumption that there is "no risk to life in medium and low rise buildings unless there is clear evidence to the contrary" it seems this is the "common sense" and "Proportionate" approach the government will be looking to the new PAS standard to adopt and where the government wants the industry to respond without wholesale cladding replacements.
The EWS 1 form does not appear to have been spoken about too much and indicates that the government are waiting for the RICS to review this following the withdrawal of the CAN and the provision an indemnity scheme for assessors. The change we consider will need to be based on the assumption of no risk of life to buildings 0 to 11m in height unless there is clear evidence to the contrary. For buildings over 11m, a "common sense" and "Proportionate" approach through the PAS 9980 risk assessment process to be undertaken.
As the EWS1 form is to highlight not only risk but the cost to make safe for the valuation of any leasehold interest in a multi-occupied residential building. We suspect the Government may believe whatever the industry comes up with by “early March” will no longer require this assessment. We suspect this thinking may be flawed.
#4 New protections for leaseholders living in their own flats: with no bills for fixing unsafe cladding and new statutory protections for leaseholders within the Building Safety Bill
Whilst this is probably the thrust of this announcement, we still consider that there will potential costs to leaseholders outside of “cladding” if building owners fully explore the external walls of their buildings.