Suppliers in the frame to pay for remediation of unsafe buildings

In an earlier article, I pointed to a growing anger amongst contractors and developers that the Government were looking for them to fund the expected £4billion cost of remediating defective cladding on residential buildings between 11 and 18 metres in England and Wales, whilst those responsible for the manufacture and supply of the installed materials were not being compelled to make a contribution. This anger has been channelled into the feedback given to the Government, and it appears that the Government has listened.

The Secretary of State for Housing, Communities and Local Government of the United Kingdom, Michael Gove MP met with the Home Builders Federation and representatives from the top 20 housebuilders to discuss his plans on 20 January 2022. At this meeting, the industry position was made clear – whilst they supported the Government's approach to protect leaseholders from the high costs of remedial works and would engage constructively with plans and discussions, the costs should not sit solely with developers and contractors when others were involved in the problems.

The latest correspondence from the Government reflects a change in its tactics, taking account of this feedback. In a letter issued to the Construction Products Association (the industry trade association that represents manufacturers and suppliers of construction products) on 22 January 2022, Mr Gove has confirmed he will also be looking to cladding and insulation manufacturers to contribute towards the remedial costs of buildings with unsafe cladding.

In the letter, Mr Gove:

• Identifies an "extremely alarming" culture and practices among major cladding and insulation manufacturers;
• Notes that a number of cladding and insulation companies' products and services have contributed to the need for remediation of buildings taller than 11 metres and points to the profits of more than £700million made by the "three cladding and insulation firms most closely associated with the refurbishment of Grenfell Tower" in the four years since the tragedy;
• Confirmed that the contribution he is seeking from the cladding and insulation sector is "a significant portion" of the total remediation costs which will be required. Interestingly, the letter refers to costs for both buildings between 11 and 18 metres and those over 18 metres (£9.1 billion in total);
• Seeks a public funding commitment from the industry by the end of March;
• Confirms that there is "no future" for companies who do not fully commit to this approach, confirming that he will look to use regulatory powers to limit or exclude such companies from operating and selling products in the United Kingdom.

What Next?

As with the earlier letter to the construction industry, the details of how the Government plans will come together are not yet set out in detail, as Mr Gove is looking to meet with the Construction Products Association "shortly". Once their response, and whether they will comply with the Government's requests, is known it will become clearer what the next steps will be. Until then contractors, manufactures and property owners will all be watching with bated breath.