by Iain McIlwee | 4 Feb, 2022 | Building Safety Act
This week FIS attended a meeting of the Construction Products Association to look at feedback from a Round Table Meeting for Product Manufacturers with Secretary of State, Michael Gove, and his team. The approach (see here) is that the Government expects Industry to fnd a way to meet the financial shortfall in cladding replacement on buildings over 11m. Their priority is to protect leaseholders. Similar meetings have also taken place with Developers.
FIS members are, in the main one step removed from this or not directly involved in cladding issues, but our concern remans that this is the tip of the iceberg. FIS CEO Iain McIlwee commented:
“This is starting to feel like Round One of a boxing match and Governent has come out swinging. There is alot of threat, but not much weight in the punches at the moment, but they seem to have us on the back foot and up against the ropes. I think the concern for me is I can’t see the barrage ending and it feels like they are trying to bully us into submission. I am also concerned that these haymakers are distracting us from the big knock out punch that could come from the recent vote in the Commons on the Defective Premises Act. A retrospective impact of 12 years was already difficult to absorb, but can you imagine how hard it will be to pull out records from projects that are 30 years old!”.
The Defective Premises Act was debated in the Commons in January and the ammendment below successfully voted.
“That is why we tabled Government amendment 41, which will retrospectively extend the limitation period for section 1 of the 1972 Act to 30 years, meaning that there will be access to this route of redress for buildings completed from mid-1992 onwards. That represents a substantial extension beyond the current six years. I recognise that changing the law in this way is unusual and that 30 years represents a long limitation period. However, I consider that the exceptionality of the current circumstances in respect of cladding and other serious fire safety defects warrants the longer retrospective limitation period of 30 years.”
It should be noted that this does not mean it will be passed in law and Parliamentary processes will subject it to further scrutiny, but the direction of travel it is not good news for construction. FIS has again raised concerns through the CLC and our Umbrella lobby groups (CPA and BuildUK) as well as directly with MPs making the points:
- The period of 30 years steps outside any contractual obligation or insurance provision. Effectively this is a retrospective uncapped liability.
- Proving liability will be diffcult as records are likely to have been destroyed (there was no obligaton to maintain records for this long).
- The behaviours this will drive will echo the PFI, forensic surveyor engaged exclsively to reallocate risk and lead to adversarial relationships.
- The likelihood is a lot of the blame will cascade to the Specialist Contractors who signed unfair contracts and operated under conditions where they were not set up to succeed due to procurement and contractual processes.
- Many will no longer be trading and few in the construction industry will have sufficient resource to carry this, effectively they will be put out of business and the problem will not be solved.
- We already have an insurance crisis, this may make it difficult to secure insurance at a realistic price
One FIS member put it well:
“On the face of it, it will be very hard to impliment and I think it will only really serve to keep lawyers in fees! We priced and designed based upon the applicable laws at the time, move the goalposts afterwards and there is a whole area for debate that goes nowhere near whether the actual installation was compliant with the guidance at the time and the accepted industry practices of that period.”
FS has long advocated an insurance based levy, similar to the Pension Protection Fund that would help share and phase payments fairly over time.
by Iain McIlwee | 28 Jan, 2022 | Building Safety Act
Yesterday the Construction Products Association met with the Rt Hon Michael Gove MP, Secretary of State at the Department for Levelling Up, Housing and Communities (DLUHC) to discuss his demand for a contribution he believes that cladding and insulation manufacturers will need to make to help fix the crisis currently impacting leaseholders of buildings that require remediation. The meeting was also attended by Lord Stephen Greenhalgh (the Minister for Building Safety and Fire), members of the department’s Residents Voice and Building Safety Levy team, and a handful of CPA company members within the cladding and insulation sector who were directly invited by the department.
Reiterating what he wrote to the CPA before the meeting, the Minister made clear that he is expecting a clear commitment from the (cladding and insulation) sector to make financial contributions in this year and in subsequent years, as he has already asked property developers to do. The CPA’s response to that same letter can be found here.
Subsequent meetings between the CPA and DLUHC are expected over the coming weeks in order to discuss and study the matter further. FIS is an active member of CPA and through this membership, our members access additional technical support and market intelligence as well as benefit from representative support from this umbrella body. If you have any points to make on the letter or the CPA response, don’t hesitate to contact Iain McIlwee, FIS CEO (iainmcilwee@thefis.org). Iain is currently a Vice Chair of the CPA.
CPA Chief Executive Peter Caplehorn has been invited to give oral evidence at a meeting of the House of Commons Levelling Up, Housing and Communities Select Committee, on the subject of “Building Safety: Remediation and Funding”, and relates to the CPA’s recent meeting with Secretary of State Michael Gove. The session is planned for Monday, 31 January at 4pm. Click here for further information and to watch the session.
For the FIS response to the initial open letter from Secretary of State Michael Gove, click here
by Clair Mooney | 20 Jan, 2022 | Building Safety Act
Peter Baker, Chief Inspector of Buildings, recently presented plans for the new Building Safety Regulator to Build UK members in a workshop attended by FIS CEO Iain McIlwee.
The regulator will oversee the new regulatory regime for high‐rise buildings over 18m, as well as the competence and safety of all buildings.
Three new ‘gateways’ will be created as part of the design and construction process to ensure compliance with Building Regulations at each stage, and the regulator will become the Building Control Authority that signs off a building at every gateway. With the Building Safety Bill expected to receive Royal Assent in the spring, Peter highlighted the rapid pace of change and the need for duty holders (aligned to CDM) to understand their responsibilities.
Beyond a little more clarity on the process and timings key points to draw are that whilst the regulatory enforcement regime and process is changing most dramatically for buildings above 18m, the changes will ripple through all of construction with secondary regulation, competence expectations and enforcement and controls enacted by the new construction products regulator and changes to Building Control impacting all buildings.
Peter refrained from comment on the new policy approach being adopted by Secretary of State, Michael Gove, in managing legacy issues that FIS has publicly expressed concern on. He did encourage companies to look to the Building a Safer Future Charter and the Code for Construction Product Information as good ways to get ahead of change.
These two mechanisms to support compliance have also been highlighted by the Industry Safety Steering Group (ISSG) has published its third annual report on the progress of culture change in construction. Whilst the ISSG was disappointed that despite all the talk there is not significant momentum across the industry.
The FIS has produced more detailed information on the Building Safety Bill here.
by Clair Mooney | 11 Jan, 2022 | Building Safety Act
FIS CEO Iain McIlwee has called for a more fair and proportionate approach, raising concerns that new Government announcements regarding cladding issues and retrospective legislation could derail future work.
In an interview with Construction News Iain said it was right to take the remediation burden off leaseholders, but that pushing costs onto developers, contractors and manufacturers would “run the risk of derailing future work”. He warned the policy could lead to years of legal disputes as well suggesting that a levy-based Building Safety Fund culd be a better alternative.
Finishes and Interiors Sector (FIS) chief executive Iain McIlwee said it was right to take the remediation burden off leaseholders, but that pushing costs onto developers, contractors and manufacturers would “run the risk of derailing future work”. He warned the policy could lead to years of legal disputes as well.
“The only winners will be the lawyers and the administrators and the real losers will be the small and medium-sized contractors and subcontractors, who are bound by heavily amended contracts and are operating in exceptionally difficult circumstances,” McIlwee said. “[They] will be left holding the bill when the music stops.”
The FIS said a levy-based Building Safety Fund could be a better alternative.
Iain’s concerns were echoed in a response to the article from an FIS Member who stated:
“We have real concerns regarding contracts amended in favour of contractors and developers. We already have various clients pointing contracts at us regarding specification and design when in reality they were responsible. The legal route could destroy half of the businesses in our trade sector with the loss of expertise and jobs.”
The full article, which includes comments from other trade bodies and NBS is available here. ‘Neither fair nor proportionate’ – industry reacts to £4bn cladding clawback
Source: Construction News
Further comment by FIS and a copy of the original letter from Michael Gove is available here.
by Iain McIlwee | 11 Jan, 2022 | Building Safety Act
Today Housing secretary Michael Gove has warned developers, contractors and manufacturers they must fork out £4 billion to fix dangerous cladding on low-rise buildings. Whilst this may seem to be good news to some – Government has at last made a stand – our concern is the impact and ripple effect that this will have has been not been fully understood.
FIS predicted this news before Christmas and our firm view remains that the current approach is more about winning the blame game than solving the problem.
In his opening remarks Gove said it wasn’t fair that leaseholder take the financial impact, this is true but it is also true that the construction sector shouldn’t shoulder more than its fair share of the burden. The current approach will see years of legal wranglings with costs simply being pushed down the supply chain. The only winners will be the lawyers and the administrators and the real losers will be the small and medium sized contractors and subcontractors, who bound by heavily amended contracts (designed to deflect risk), operating in exceptionally difficult circumstances and could well be left holding the bill when the music stops. New procurement guidance targeted at stopping prioritising cost over value clearly recognises the challenges that the supply chain was under and seeks to change the culture, but this approach was endemic in the past.
Commenting on the letter FIS CEO, Iain McIlwee stated:
“This latest announcement is focussed on cladding, but we know this is not the only issue and when read in context with other correspondence and the retrospective application of changes to the Defective Premises Act it is troubling. In his opening remarks Gove said it wasn’t fair that leaseholder take the financial impact but it is also true that the construction sector shouldn’t shoulder more than its fair share of the burden. The issue is about being proportionate. By passing the entire responsibility on to the construction sector we run the risk of derailing future work whilst we manage this legacy. It is very difficult for the industry to look forward when there is a shadow that is getting darker with every announcement looming over our shoulder.
We have to accept this is a systemic breakdown, regulation and guidance was not clear and new procurement guidance targeted at stopping prioritising cost, over value, is recognition of the challenges that much of the supply chain have been struggling with. Unrealistic cost and time pressure have been masked by terms like value engineering and liquidated damages and dumped in “standard contracts” that were amended beyond all recognition to dump risk through the supply chain. I remain unconvinced that the solution is in the interventions we are seeing and suspect the only winners will be the lawyers and the administrators with cost and blame being pushed through the supply chain. A better approach is a levy based Building Safety Fund and we have written to Mr Gove and his department to recommend this.”
A better solution has to be found. FIS has long advocated – a similar approach to the Pension Protection Fund. Putting a £4 billion pound threat on to contractors, developers and manufacturer may win headlines now but it will just create an even bigger problem further down the road.
Read the full open letter from Michael Gove here
by Iain McIlwee | 27 Dec, 2021 | Building Safety Act
The UK Government has notified the Committee on Technical Barriers to Trade at the World Trade Organisation (WTO) of their intention to bring into force the Construction Products Regulations 2022. The document correspondence provides a useful update of the intent and focus of changes to the regulatory environment for construction products. GBR45_EN
The Building Safety Bill will carry the necessary legal changes
In correspondence with the World Trade Organisation the Department for Levelling Up, Housing and Communities (DLUHC) have advised WTO thar regulations will be made under the Building Safety Bill (once it has received Royal Assent) and will extend the existing regulatory framework to cover all construction products placed on the market in the UK. The existing regulatory framework for construction products, which derives from EU law, will remain in place for Great Britain (the EU regulatory regime for construction products will continue to apply in Northern Ireland as per the Northern Ireland Protocol). The regulation of safety critical products and the requirement for construction products to be safe will be extended to Northern Ireland.
DLUHC has also advised WTO that the intention of these regulations is to require that construction products placed on the UK market are safe, and can be used safely. It will do this by placing obligations on economic operators in the supply chain, including to carry out a risk assessment, provide customer information and to take corrective measures where necessary.
The Bill includes a power to create a statutory list of ‘safety critical’ construction product standards (where their failure would risk causing serious injury or death). The
regulations set out that manufacturers will be required to complete a declaration of performance, put in place factory production controls and follow the specified system of assessment and verification of constancy of performance to ensure that the claimed performance is consistently met. This will bring the regulation of these products in line with arrangements for products covered by the existing regulatory framework, including the affixation of a UKCA mark. Other economic operators in the supply chain will have obligations placed on them to support compliance with these requirements.
The overall aim is that regulations will strengthen the market surveillance and enforcement regime for construction products so that safety concerns can be identified and dealt with, and action can be taken against those who do not comply with the regulations. This includes powers to investigate, take civil action or prosecute economic operators for breaches in construction products regulations.
Grenfell has highlighted that “many construction products do not fall under a regulatory framework”.
DLUHC advise WTO that changes are necessary following the fatal fire at Grenfell Tower where it became apparent that many construction products do not fall under a regulatory framework. This means that regulators lack powers to act if certain products do not perform in the way they are claimed to, or if they are unsafe. The intent is to make sure that construction products fall under a proportionate regulatory regime that protects the public effectively from products that are not safe. To be effective, reforms must achieve their objective to ensure that products are safe, and can be used safely, in a way that is proportionate to the risk posed by the product. That is why the most stringent requirements (which are equivalent to the existing regulatory regime), including providing clear and accurate performance information, undertaking third-party conformity assessment (where required) and affixing the UKCA marking, will fall only on construction products deemed to be safety critical, where their failure would risk causing serious injury or death.
Other products which currently fall outside of clear regulatory requirements will be required to be safe before they can be placed on the market, aligning with the minimum standard required for consumer products. This broad outcome-based requirement to assess safety risks, rather than requiring specific standards will ensure that the reformed regime will enable rather than restrict market access for innovative products. A new national regulator for construction products will more effectively and proportionately enforce this reformed regulatory framework, improving the ability to remove non-compliant products from the market and to deter non-compliance. This will help to level the playing field between companies who follow best practice and who comply with the law, and those that try to seek a competitive advantage through non-compliance.
A full copy of this correspondence can be seen here.
A full summary of the Building Safety Bill written by FIS is available here
