BECG Group has launched a new specialist Building Safety Unit, which brings together award-winning and multi-disciplined teams, dedicated to providing strategic counsel to clients affected by the fire and building safety agenda across the UK.
Despite government and industry efforts to find solutions since the Grenfell Tower tragedy in 2017 -policymakers, developers, managing agents and housing associations are all required to seek solutions to tackle the cladding scandal whilst navigating legislative changes and economic challenges brought on by Covid-19.
The new Building Safety Unit will offer clients a multidisciplinary service to meet the growing challenge of fire and building safety – from strategic leadership to integrated support across crisis communications, specialist resident and community engagement, media relations, communications, and government relations.
The new unit will draw on experts from across the Group, including BECG, CrowdControlHQ and Liberty One Communications.
The Unit will be led by Jenny Riddell Carpenter, who has led crisis communications for high profile building safety issues across the UK and oversees fire and building safety and remediation communications for some of the UK’s largest housing associations and housebuilders.
BECG CEO Stephen Pomeroy said:
Building Safety is one of the most prominent issues facing our clients and the sector. Our dedicated team are expertly placed to help organisations navigate this difficult landscape, providing expert counsel and award-winning communications support.
For more information, and to sign up to insights and analysis from the Building Safety Unit – please visit our Building Safety Unit page
The Secretary of State for Housing, Communities and Local Government, Robert Jenrick set out details in Parliament for further funding to remove unsafe cladding, and provide certainty to leaseholders, whilst making “the industry pay”.
With a firm commitment from the Secretary of State that the Government would “finish the job that we started”, the announcement set out:
- New £3.5 billion in grant funding to supplement the existing Building Safety Fund to pay for the removal and replacement of unsafe cladding in all buildings over eighteen meters in height, taking the total commitment from Government to £5billion
- Loan scheme to ensure that leaseholders in lower and medium rise buildings between 11 and 18 meters do not pay more than £50 a month for unsafe cladding removal
- New developer levy to be introduced in the forthcoming Building Safety Bill, this at would only apply when developers sought to develop certain high-rise buildings in England.
- Introduction of a new tax for the UK residential property sector in 2022, raising around £2bn over a decade to pay for cladding remediation costs.
This announcement comes after several national newspapers, MPs and campaign bodies joined forces to call on Government to “end our cladding scandal”. Over the past few months, the Government has been under immense pressure to act – not least to ensure buildings are safe, but to also find a way forward that protects leaseholders, and cuts through the complex legal set up between leaseholders, freeholders, managing agents and developers – which often inhibits progress.
However, whilst the new funding to support remediation for buildings over 18 metres in height will be welcome news, the new loan agreement for buildings under 18 metres may yet prove to be controversial.
According to The Times report (before the detail was set out to Parliament), more than 40 Conservative MPs have indicated that they are prepared to rebel over loans for leaseholders. These potential rebels include former cabinet ministers, Damian Green and Andrew Mitchell, whilst Stephen McPartland, a leading Conservative backbencher was quoted saying “[the loans] are not a solution, they are a disgraceful betrayal.”
The announcement today also comes after Inside Housing released the results of their own survey of leaseholders living in developments that require remediation. This survey paints a clear picture that those affected are largely young first time buyers, with middle incomes and who are faced by remediation costs which risk “wiping out” their personal savings.
Does this new announcement from Government end the building safety problem? In short, no. This new funding commitments from Government helps to tackle one small part of a highly complex jigsaw puzzle, but challenges that the Government will still be required to navigate include:
1. The £5 billion funding doesn’t tackle wider building and fire safety issues.
The new fund only intends to cover the removal and replacement of cladding from buildings over 18 metres in height. It does nothing to help support building safety and fire safety issues beyond cladding – such as internal and external defects, including fire stopping and structural defects. In addition, where cladding remediation works take place, it is entirely possible that this work could uncover further fire safety issues in a building – and the National Audit Office has found that cladding inspection has revealed significant flaws in many cases. Where remediation is then required, a second set of remediation costs will be incurred, which will not be covered under this new funding. There is a risk that costs can still be passed back to leaseholders, even where this initial work was funded by Government.
2. Buildings under 18 metres which need cladding removed will be paid for by leaseholders.
Under the new arrangement, buildings which need their cladding removed but are less than 18 metres in height will not be covered by the funding. While the total loan amount may feel small – £50 per month – there is no indication how long the loan would last for, nor what the total bill would be.
Beyond this, we should expect to see the age-old question of “fairness” play out – with questions posed as to why some leaseholders are being treated differently to others. Labour MPs have already spoken out against the loan – and this could build further over the coming weeks if Conservative backbenchers also continue to share their frustrations.
3. The legal responsibility for remediation remains a core challenge
The legal liability for remediation is extremely complex. In most cases, leaseholders living in high rise apartment building are legally liable for the costs of remediation works carried out on their building. However, this also depends on the drafting of individual leases, which is often very inconsistent. However, where leaseholders have been made to pay, they have often struggled to fulfil these obligations. The Government expects building owners and landlords to bear the cost for remediation, but it has stopped short of mandating this. Today’s announcement clearly aims to resolve this complex issue once and for all , but fails to support leaseholders living in properties less than 18 metres in height.
4. Further clarity is needed by Government on EWS1 forms.
Many mortgage lenders now require confirmation that the entire external wall system of a building (regardless of ages and height) complies with Government advice. This is usually requested as an EWS1 form, which can be issued by the building owners, which is a standardised process developed by the Royal Institute of Chartered Surveyors (RICS). The EWS1 process was launched in December 2019 as a way to assess the external wall safety of buildings over 18 metres in height. Whilst it has been made clear by RICS that if a building is under 18 meters in height an EWS1 form is not required, some lenders and insurers do request that EWS1 forms are provided by leaseholders who are looking to sell or re-mortgage their home. This therefore leaves leaseholders in limbo, as applications for a loan to remediate their properties would refer to works that are not deemed necessary, and raises a further question regarding whether leaseholders have the right to reject the proposed remediation works? There is no clarity on this position at the moment.
The BECG Group’s specialist Building Safety Unit provides leading expertise across building safety issues, which includes specialist resident and community engagement, planning communications, crisis communications, media relations, and expert policy counsel and government relations. To find out more contact us 020 3697 7630 or firstname.lastname@example.org.
As the Department for Health lowers the coronavirus alert level from a “four” to a “three”, there are cautious signs of optimism that the health crisis, brought about by the COVID-19, is coming under control. Lock down and social distancing measures appear to have worked; today, NHS intensive care units (ICUs) across the UK now have less than 500 patients on ventilators – at the peak of the crisis, this figure was well over 3,000.
But while the spread of the virus has slowed, the health crisis has begun to morph into a social and economic crisis.
This week, we saw the latest set of unemployment figures released by the Office for National Statistics (ONS), revealing that over 600,000 people lost their jobs between March to May. Meanwhile, jobless claims under Universal Credit jumped to 2.8 million in May alone, marking a 125.9% increase since the beginning of lock down.
We have been helping to lead a national cross-industry campaign on the issue, calling on UK Government to create a new ‘Opportunity Guarantee‘ for the unemployed, and to help support the UK’s longer-term economic recovery. You can read the cross-industry letter in The Sunday Times here.
The next two months will prove critical if the UK’s economy is able to bounce back quickly. The Bank of England’s new £100bn stimulus package, announced yesterday, aims to help the UK weather the economic storm, and navigate out of what is widely expected to be one of its deepest-ever recessions.
The next few weeks will prove critical for all UK organisations – regardless of sector, size and focus. With the shockwaves of the initial health crisis subsiding, businesses need to now be ready for the next stage of the COVID-19 challenge and help define their future survival. Private, public and third sector bodies should all now be acting on:
- Working with Government and key stakeholders: provide evidence and insight to the challenges facing your industry. Although it may feel an overused term, this crisis is truly ‘unprecedented’. Government and policy makers have never faced a challenge of this nature or scale and proactive Government engagement now will enable your organisation to help shape the policy and support both your industry and the future of your business. We are currently supporting six industry taskforces, working with Government departments, sector bodies and leading businesses to shape the UK’s economic and social response to coronavirus.
- Understanding what matters to your customers, your employees and stakeholders: the needs of your audience have changed, and they will continue to evolve over the months ahead. Ensure that your business priorities are re-aligned to meet these new needs – failure to do so will limit business survival in the longer-term.
- Investing in the right channels to market: just as your audience needs have changed, your routes to market and reach across communication channels need to adapt. Over the past few months’, we have helped businesses communicate through different channels to support business continuity. Make sure your organisation’s communications and engagement is ‘proactively’ adapting now, enabling you to be competitively placed for the challenges that lie ahead.
- Understanding, auditing and critically reviewing your organisation’s reputation and crisis preparedness: as the world continues to undergo considerable change, understanding how your business is able to respond, and where any future risks lie will be critical for future business continuity. We have just launched a Crisis Diagnostics service, which provides businesses with the opportunity to evaluate strategic and operational strengths and weaknesses, enabling a strategic re-alignment to respond effectively to future and anticipated issues.
If you’d like help with any of the challenges that your organisation is facing as a result of COVID-19 then please get in touch.
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