UK Developers Forced to Fix Cladding
The Secretary of State for Leveling Up, Housing and Communities and Minister for Intergovernmental Relations in the United Kingdom recently issued a letter to residential property developers in the country, informing industry professionals that they must agree to fund the replacement of unsafe cladding on mid-rise buildings.
“It is neither fair nor decent that innocent leaseholders, many of whom have worked hard and made sacrifices to get a foot on the housing ladder, should be landed with bills they cannot afford to fix problems they did not cause,” wrote Secretary Michael Gove.
“Government has accepted its share of responsibility and made significant financial provision through its ACM remediation program and the Building Safety Fund. Some developers have started doing the right thing and funded remedial works and I commend them for those actions. But too many others have failed to live up to their responsibilities.”
Fire Background, Cladding Inquiry
On June 14, 2017, Grenfell Tower—a 24-story, 120-home apartment building—caught fire and resulted in the death of 72 people. While the fire started in a fridge-freezer in an apartment on the fourth floor, the blaze then spread to a nearby window. The building had recently undergone a $12.73 million renovation that was completed in the spring of 2016 and is largely believed to be responsible for why the fire spread so quickly.
An inquiry was launched to get to the bottom of who was responsible. Phase One of the inquiry was published on Oct. 30, 2019. This phase was to look at what happened on the night of the fire itself, and the 1,000-page report criticized not only the response to the fire but the 2016 renovation as well.
Arguably of most importance, inquiry head Sir Martin Moore-Bick, a retired Court of Appeals judge, said that it seems that the refurbishment did not comply with the building regulations requirement to adequately resist the spread of fire.
“There is compelling evidence that Requirement B4(1) was not met in this case,” he said at the time. “It would be an affront to common sense to hold otherwise.”
In addition to the preliminary conclusions on the 2016 refurbishment, the report also accused the fire brigade’s response to the fire as having “systematic failures” with no contingency plan to evacuate the tower. It also criticized the brigade’s decision to maintain the “stay-put policy” even when the stairs were passable.
The second phase, which started Jan. 27, 2020, examined the refurbishment, including the installation of flammable cladding.
According to the Telegraph, this phase was said to be more complex than the first, which took 16 months to complete. Preparation for this phase reportedly unearthed 200,000 documents and the phase will be split into eight “modules,” with 21 companies and 600 individuals named as “core participants.”
Among the modules, the areas that were investigated included the refurbishment itself, the testing of the cladding, complaints from residents prior to the fire, the management of the building and the aftermath of it all.
Some estimates say that it could take Moore-Bick until at least 2023 to publish a final report. Only then would police and prosecutors get a chance to review the findings and then pursue charges, if any.
A few days into the second phase, after much finger-pointing, lawyers for Studio E, Rydon, the TMO and Harley wrote to Moore-Bick arguing that their clients could claim privilege against self-incrimination and not answer questions, noting that they would only speak openly if the attorney general gave an understanding that nothing they said would be used against them in criminal prosecution.
In late February, U.K. Attorney General Suella Braverman announced that she was granting the undertaking. In her letter to Moore-Bick, Braverman wrote that receiving “substantive answers” to questions in the probe is of an important public interest. Therefore, the undertaking will cover people, will not impact the ongoing criminal investigation and will not jeopardize criminal prosecutions.
In early March, lead architect, Bruce Sounes, admitted that he had not read the Building Regulations covering fire safety in high-rises. He said at the time that he was “largely unaware there was specific guidance in Approved Document B for buildings taller than 18 meters and did not know that aluminum panels could melt.”
In addition, it also came to light that the tenant management organization had breached regulations in the appointment of Studio E. The company reportedly, deliberately deferred a chunk of its fees to stay under the threshold that would trigger an open public tender for design services.
The practice also admitted to having no experience in overcladding or refurbishing high-rises, meaning that it would’ve been unlikely that the firm would have won any public competitive procurement process.
Instead, the Studio landed the job “on the back of its work for the local council on the linked Kensington Academy and Leisure Centre.”
The first testimonies after the hiatus revealed that the principal fire engineer for the tower’s refurbishment did not order a separate fire assessment of the cladding. After the hearing wrapped up testimony with the architecture firm, Sounes told the inquiry that he had originally wanted to use the non-combustible Rockwool insulation for the tower cladding.
However, engineering firm Max Fordham had put for a U-value target of 0.15W/m²K for the insulation, with a specification of 150-200mm. Sounes said that the amount of Rockwool required would have pushed the cladding line out to around 450mm, which was “unfeasible” because of the targets, which is when the Celotex RS5000 was suggested.
The last testimony before the break revealed that a site manager on the refurbishment, who was responsible for overseeing the installation of overcladding and window insulation, was moved from the project because of concerns on his work.
A contract manager, Simon Lawrence, reportedly wrote to Stephen Blake, refurbishment director, about Daniel Osgood, saying that Osgood “couldn’t be bothered” to check if the work was being done correctly.
Lawrence said that the work done in the show flat (the first property that was to showcase the standard for the refurbishment) was sub-par and that the work was never remediated. Osgood testified that he disagreed with the critiques on his work.
Before these statements, however, Lawrence had already come under fire in the testimony after multiple concerns from the Kensington and Chelsea Tenant Management Organization either were ignored or not taken seriously.
The inquiry heard that Lawrence had received an email from Clair Williams of the KCTMO seeking clarification on whether the cladding would resist a fire; the email referenced a “Lakanal moment,” which referred to a 2009 high-rise fire in London.
According to the inquiry, there is no evidence that anyone at Rydon responded to the email.
In addition to the email incident, another member of the TMO, David Gibson, said in a witness statement that he had asked Lawrence if there would be a “Lakanal type problem” in regard to the gaps between the insulation and the cladding.
Gibson said that Lawrence assured him that the materials wouldn’t burn and were “inert.”
In early September—after summer break—Ray Bailey, owner and managing director of Harley, maintained that the building regulations and mandates are unclear and that he was reassured by several entities that the cladding and insulation were safe.
The crux of Bailey’s defense is that he admitted that he incorrectly believed that the insulation was of limited combustibility and therefore complied with Approved Document B, which details fire safety regulations.
Early in October, officials heard that restructure at the borough council led to an unbalanced workload. Days before, John Hoban, the building control officer for Grenfell Tower, told the inquiry that the cuts to the team meant he was working on up to 130 jobs at once and that he was unable to do his job properly.
In February of last year, the first—and probably only—person from Arconic testified in front of the Grenfell Tower Inquiry, revealing that the company sold panels that it knew were flammable because of costs. Employees from Arconic as a whole made up much of the group that previously refused to testify.
Deborah French, who was the U.K. manager for Arconic from 2007-14 told the inquiry that she knew the polyethylene core panels that were used in the building’s envelope were flammable and that those panels are sold as the default because the fire-resistant version would be “less likely to secure contracts.”
French also admitted to misleading buyers of the panels by saying they were Class 0-certified by the British Board of Agrement, which tests and certifies construction products. However, the certification from the BBA stated that some Reynobond panels “may be regarded as having a Class 0 surface,” despite never having been officially tested and certified.
Despite the lack of Arconic personnel, the inquiry also heard from Andrew Pack, Kingspan’s technical team manager at the time of the Grenfell Tower refurbishment, with questions about how its K15 insulation product received its Local Authority Building Control Certificate (in addition to the BBA) despite unclear wording and proof of fire performance.
Cladding Ban Background
In December 2018, the U.K. announced a ban on combustible materials, more than a year after London’s Grenfell Tower fire. Former housing secretary James Brokenshire announced that under the new legislation, combustible materials would not be permitted in the exterior walls for new buildings more than 18 meters (59 feet) tall. Those buildings include homes, hospitals, residential care facilities, dormitories and other student accommodations.
That ban limits the use of materials to products that achieve a European fire-resistance rating of Class A1 or A2. The legislation also cleared up what exactly the government meant by an “exterior wall,” defining it as an external wall as anything “located within any space forming part of the wall.” It also includes any decoration or finishes applied to external surfaces, windows or doors; roof pitches at an angle of more than 70 degrees; balconies and devices for deflecting sunlight and solar panels.
In December 2018, the U.K. announced a ban on combustible materials, more than a year after London’s Grenfell Tower fire.
The policy also prohibits the use of timber materials in the external wall of buildings in those parameters as well, which will stop many project in their tracks, according to the Architects’ Journal, referring to developers using the cross-laminated timber construction method.
The materials ban took effect Dec. 21, 2018, but in December 2019 part of the ban was overhauled following a lawsuit by the British Blind & Shutter Association. (The court rules that the ban should not have included materials used on shutters, blinds and other products designed to reduce a building’s heat gain.)
Concerns on the cladding ban only including high-rises were raised after a Nov. 15, 2019, fire in Bolton, U.K., in a student housing block referred to as “The Cube.” At the end of January 2020, Jenrick put forth new measures with the goal to move “faster and further to improve building safety,” including:
At the time, the proposal was met with praise from industry members, such as the Royal Institute of British Architects. Then, a year later, Jenrick unveiled the new regulatory body that is tasked with overseeing the safety of construction materials.
In March 2021, it was reported that Parliament was at odds over a levy and taxes that had been placed on the U.K.’s construction industry. While the money raised is earmarked for cladding remediation in high-rise buildings, some say that those who’ve used the correct materials all along were being penalized by the new measures and the added costs would make their way down to homebuyers and cut the availability of affordable housing.
Housing Secretary Robert Jenrick unveiled the plan just a month prior, which included the taxes as well as announcing other government funding and measures to try to boost the housing market. The plan involved a 5-billion-pound investment from the government into building safety, that aimed to ensure that no leaseholder will pay more than 50 pounds a month toward the removal and remediation of unsafe cladding.
The Gateway 2 developer levy was targeted and applied when developers sought permission to develop certain high-rise buildings in England. In addition, the new tax, is slated to be formally introduced in 2022, is for the residential property development sector and hopes to raise at least 2 billion pounds over the next 10 years.
Government Settlement Opportunity
In a letter dated Jan. 10, Secretary Gove has informed the industry that the department will be offering a window of opportunity, between now and March, to conduct open and transparent negotiations to agree on a settlement that will “restore confidence and ensure the industry that caused the problem pays to fix it.”
Previously, ministers have allocated 5.1 billion pounds of public money to pay for the remediation of flammable facades on high-rise residential buildings, typically 18-meters-tall or higher. According to reports, many thousands of leaseholders in blocks shorter than 18 meters had previously only been promised government help with costs in the form of a loan scheme.
Since scrapping the scheme, the U.K. government has committed to the building industry funding cladding work on blocks between 11 and 18 meters – typically from four to six stories high.
The deals are to be built around clear commitments from developers and should include the following:
Gove also plans to open discussions through a roundtable that brings together 20 of the largest housebuilders and developer trade bodies, followed by ongoing negotiations with all those in scope. According to reports, this includes housebuilders with annual profits of more than 10 million euros will be the ones forced to make contributions towards the government’s cladding remediation fund.
The department expects to create a clear, fully funded plan of action that can be made available to the public and affected leaseholders by early March.
Despite these efforts, Gove also wrote that the department is prepared to take steps such as restricting access to government funding and future procurements, the use of planning powers, the pursuit of companies through the courts and imposition of a solution in law should the industry fail to take responsibility.
“Our home should be a source of security and pride. For too many of the people living in properties your industry has built in recent years, their home has become a source of misery. This must change,” Gove concluded.
Moving forward, the government intends to amend the upcoming Building Safety Bill to protect leaseholders from the cost of fixing non-cladding safety defects, which have been uncovered at numerous blocks during facade inspections. In addition, a new team has also been established to pursue companies deemed to have contributed to the crisis by selling products, cutting corners in building work or seeking to profit from the fallout.