Earlier in January 2022 we reported on a "milestone" announcement by Michael Gove MP, Secretary of State for the Department for Levelling Up, Housing & Communities (DLUHC), whereby residential developers were invited to voluntarily pay into a £4 billion fund to meet the costs of remediating buildings with fire safety issues.
Whilst that announcement has received cautious backing across the political spectrum, many commentators have questioned whether the burden of meeting the remedial costs should necessarily fall entirely to residential developers, or whether the manufacturers of cladding and insulation materials could, or should, bear some of the responsibility.
Window of opportunity to the residential property development industry
With wording highly reminiscent of the offer made to residential property developers, Mr Gove has, on 22 January 2022, written to the Construction Products Association to offer "a window of opportunity between now and March" for the sector to work with the DLUHC to "agree a settlement that will restore confidence and secure an appropriate contribution from the sector".
In particular, it appears that Mr Gove envisages the settlement to include a commitment to:
- Make financial contributions in this and subsequent years in the same manner as has been asked of residential developers; and
- Provide "comprehensive information" on all buildings over 11m with fire-safety defects to which individual companies have supplied products or services.
Whilst it could be said that Mr Gove's previous letter to residential developers sought to be fairly collaborative in nature, there is a change in tone in the letter to the construction products industry with regards to the "stick" if the industry does not respond. Indeed, the letter threatens:
- The use of a regulatory framework to limit any "culpable" company from operating and selling products in the UK in the future; and
- To pursue individuals and firms liable for building defects who are "unwilling to do the right thing now".
The letter concludes, ominously that "there is no future for those companies and directors who are not fully committed to upholding the safety of residents and fixing past wrongs".
Whilst the sentiment of the message to pursue manufacturers is most likely to be widely welcomed by affected leaseholders and the construction industry there may well be some practical difficulties in making good on the threatened sanctions made by Mr Gove.
For example, a certain product may have been adequately tested and approved for use within a certain construction build up. However, if that product was then used in a different build up, not reflective of the tested and approved construction, the product may not be said to meet the safety requirements. At that stage, would it be right to tarnish the product as being "unsafe" and within the scope of this latest letter, particularly if a manufacturer may have little or no influence on how or where its products are used?
Of course, these are all very fact specific issues and it is inherently difficult to find a one size fits all approach. However, whilst the intention to recoup funds from as wide a net as possible will most likely be welcomed, as noted at the conclusion of our previous alert, we expect that the "devil will continue to be in the detail" .
If you have queries on this alert or any construction issue, please contact Sue Ryan.