Cladding crisis: Clarke should fund fixes then pursue culprits – Property Week

In October 2022, Mick Platt, Director of the RFA, was interviewed in Property Week about why building safety was the key issue facing the then newly appointed Secretary of State for DLUHC, Simon Clarke. The original piece can be read here.

Residential Freehold Association director Mick Platt on why housing secretary should reassess cladding approach

The appointment of Simon Clarke as secretary of state at the Department for Levelling Up, Housing and Communities (DLUHC) last month marks another new chapter in the government’s management of the building safety crisis, in the wake of 2017’s Grenfell Tower tragedy.

Mick Platt, director of the Residential Freehold Association, argues that the new housing secretary should grasp his opportunity to reassess the government’s approach, particularly with respect to those held responsible for footing the bill.

What would you like to see Clarke prioritise in his new role as the head of DLUHC?

The most important issue in his in-tray is to make funding available immediately so that remediation works can be carried out, alongside rectifying the contradictions in the Building Safety Act 2022.

The introduction of the act saw the government change its position on the funding of building safety remediation, reversing its previous assertion that leaseholders should not have to pay and shifting the bulk of costs on to freeholders, irrespective of their responsibility for either design, construction or the remediation project itself. In addition, the act potentially shifts liability and responsibility for projects currently in progress on to third parties.

Assigning liability in such an arbitrary fashion does not magically create more money. Instead, it creates chaos and confusion as to where funding will come from, and thereby slows down remediation work in the process. Additionally, it will inevitably cause insolvencies among building owners, forcing liability for remediation back on to leaseholders.
What alternatives might Clarke explore?

There is broad agreement that leaseholders should not be expected to bear the main burden of remediation costs. It is entirely unfair that they should be blamed for what, by the government’s own admission, was a failure of building regulation.

Freeholders with no connection to the developers or contractors responsible for making unsafe buildings are in a similar boat. They played no role in the creation of the crisis and should be treated in the same manner as leaseholders.

Instead, the government ought to make funding immediately available to carry out remediation works. This is the approach adopted in Australia.
Isn’t this what the £5bn Building Safety Fund was meant to do?

The fund was designed as compensation for leaseholders who would otherwise be liable for costs as part of their service charge. Under the new legislation, it is practically impossible for freeholders to access the money – indeed, freeholders have been trying to negotiate a workable version of the Grant Funding Agreement since April 2021.

DLUHC is currently consulting on how to fix this, but in the meantime remediation has slowed and leaseholders have been left in unsafe housing for longer.
What approach would freeholders prefer to see from DLUHC?

The government had previously put forward feasible solutions to resolve the crisis. Specifically, the principle that polluters should pay – namely developers, manufacturers and those in charge of making the decisions on the use of construction materials – rather than those who lease or own buildings. This approach was endorsed by the House of Commons Housing Committee.

But to ensure no delay to remediation, alongside this principle the government should step in to pay for remediation up front. This is for the simple reason that the state has significantly more capital to pay for the crisis than building owners or leaseholders. The state can then also bring far greater resources to bear in pursuing compensation from those responsible for failures.
What message would you send to the housing secretary as he reviews progress in remediation?

I hope Clarke will use his appointment as an opportunity to grasp this nettle. I certainly hope he at least agrees to sit down with freeholders to discuss ending confusion over liability – something his predecessors have refused to do.

Five years on from the Grenfell Tower tragedy, tenants, leaseholders and freeholders should not have to wait any longer to fix unsafe buildings.

The new government under Liz Truss has distanced itself from its predecessor. Clarke should do likewise and adopt the reforming zeal that Truss has espoused, adopting a ‘fund then pursue’ model. This would benefit everyone currently suffering due to unsafe housing.