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The Housing, Communities and Local Government Committee has urged the Government to re-commit to the principle that leaseholders should not have to pay for the removal of unsafe cladding from their homes and calls on the Government to establish a Comprehensive Building Safety Fund that addresses the true scale of fire safety issues. Finance for the fund should be provided by Government and the building industry.
In a report published today, the Committee finds that existing arrangements for remediation of cladding that base funding support on building height and materials should be changed so that financial support is targeted where residents’ safety is most at risk. Proposals to fund cladding remediation on buildings below 18 metres through a loan scheme, requiring leaseholders to pay up to £50 a month, should also be abandoned.
The Committee calls for an enhanced Comprehensive Building Safety Fund paid for by Government and industry. This would be open to all buildings with existing fire safety issues with no barriers based on height, types of tenure or the nature of fire safety defects. Priority should be given to buildings where residents are most at risk, assessed through holistic, evidence-based processes.
Chair of the Housing, Communities and Local Government Committee, Clive Betts MP said:
“While the extra funding for cladding removal is welcome, it will be swamped by the sheer scale of fire safety issues in multi-occupancy buildings. In the years since the Grenfell tragedy, we have been shocked by the reality of the danger that flammable cladding poses, by how pervasive these materials are in modern buildings and by the frequency with which fundamental fire safety measures, including fire breaks and sprinkler systems, are simply not there. £5 billion in funding is significant, but just cannot match the ongoing legacy of these fire safety failings.
“Most importantly, the Government’s recent proposals fail to adhere to the fundamental principle that leaseholders should not have to pay to fix these problems. That is why we have called on the Government to enhance support and develop a Comprehensive Building Safety Fund that targets support to where occupants are most at risk, rather than the current height- and product-based approach. Proposals to implement a loan scheme for leaseholders to pay for cladding remediation on buildings below 18 metres should also be abandoned.
“We call on the Government to revisit its proposals and develop a scheme that truly matches the scale of fire safety issues. It must prioritise support to where the safety risk is greatest and rebalance the financial burden so that it falls on the Government and industry, and not on leaseholders.”
Nigel Glen, CEO of ARMA said: "We warmly welcome the report from the Commons Select Committee with its sensible demand of the establishment of a Comprehensive Building Safety Fund, covering full remediation and associated works of affected buildings regardless of tenure, risk based rather than determined by height, and thereby shielding leaseholders from life changing bills.
"Bringing building insurance premiums under control, an area which ARMA has been working tirelessly in, is also highlighted and we look forward to a hopefully speedy resolution, perhaps even using the ARMA solution."
Key findings and recommendations
Understanding the scale of the problem
The Government is not collecting sufficient data to understand the full scale of remediation needed for buildings. Without better, information the Government cannot know the true cost of remediation, the timescale for all buildings to be made safe, or the capacity of the industry to carry out the work.
As a matter of urgency, the Government should collect and publish more data on the number of buildings awaiting remediation work. This data should include buildings between 11m and 18m, as well as buildings above 18m.
Comprehensive Building Safety Fund
The additional £3.5 billion funding towards cladding remediation announced in February is welcome but significantly more money is needed to meet the costs of fire safety remediation.
The Government should establish a Comprehensive Building Safety Fund that moves away from the current approach, based on height and material, towards one that prioritises occupants most at risk. Leaseholders are no more responsible for non-cladding fire safety defects than for the presence of combustible cladding. The costs for remediating non-cladding defects, such as fire breaks or sprinkler systems, could be as high as for cladding. Social housing providers should also have full access to funding, whether the Building Safety Fund continues as now, or if further funding mechanisms are established.
The Committee calls for a Comprehensive Building Safety Fund that:
The Government’s proposed loan scheme, whereby leaseholders contribute up to £50 a month to pay for cladding remediation works on buildings between 11m and 18m high, fails to satisfy the principle that leaseholders should not have to pay for fire safety remediation work.
The loan scheme should be abolished. Instead, costs should be fully met by the Comprehensive Building Safety Fund, paid for by the Government and the industry.
The introduction of a new developer levy and tax to ensure developers contribute towards the cost of remediation is welcome. The Committee also recognises the steps that some developers have already taken in committing millions towards remediation funds.
The Committee has previously said that the cost for addressing all fire safety defects could be up to £15 billion. Developers can and should be expected to make a greater contribution to the costs of remediation.
The developer levy tax should be extended and serve as an additional contribution to the Comprehensive Building Safety Fund. The Government should also work with stakeholders to ensure that no costs recovered through this scheme are passed on to house buyers, including housing associations.
Further work should also be carried out to examine how other sectors of the wider building industry, such as product manufacturers and suppliers, can contribute to the costs of fire safety remediation.
The exclusion of social housing landlords from the Building Safety Fund risks negative consequences for the wider social housing sector. Alongside full access to funding support, either the existing Building Safety Fund or the Committee’s preferred expanded scheme, the social housing sector should also be able to utilise the waking watch relief fund. An impact assessment should also be undertaken on the impact of cladding remediation on maintaining existing social homes and building new social homes.
Health of Residents
The Government is not doing everything it can to support the physical and mental health of residents of affected buildings. The Government should work with local authorities to ensure that affected residents have access to the physical and mental health support they need.
ARMA’s 2021 Regional Briefings were delivered to delegates as online webinars across three days. The sessions allowed members to tap into key updates from ARMA and the residential leasehold sector, with around 300 members logging-in from offices and homes across the country every day.
Day One: Industry Updates
The first day kicked off with Nigel Glen delivering ARMA highlights from the past year, including the milestone that ARMA members now manage twice as many homes as they did seven years ago.
Throughout 2020 ARMA provided its members and the industry with continued guidance on new ways of working during the pandemic, evident in its best practice guide which is currently on its 18th edition. At the same time, ARMA has continued to lobby government on building safety issues as part of a programme supported by several of the largest managing agents and IRPM. The industry efforts contributed to the extension of the Building Safety Fund application deadline (now 30th June), secured £5billion in funding and resulted in ARMA enjoying extensive media coverage across TV, print and radio.
There has been no let-up in 2021, with 34 MP meetings having already taken place since January. Among further targets is the increased scope of the Buidling Safety Fund (BSF) to include buildings of all heights, non-cladding funding to help manage fire-breaks and compartmentation issues and funding for unfunded EWS related works, to name a few. There has been plenty of non-cladding lobbying going on too, with bi-weekly MHCLG meetings, talks with Lord Greenhalgh and ARMA involvement in the Welsh and UK Select Committees Government on Buildings Safety Reforms.
The session on the ARMA and IRPM Wellbeing Survey was co-presented by IRPM CEO Andrew Bulmer and Nigel Glen. The ‘mental health check’ report, published on Thursday, offers an insight into the wellbeing and resilience of individuals working in the sector. The findings reveal a workforce that is often overstretched and under a myriad of sometimes conflicting pressures. As a result, a significant number are uncertain of their future within the industry. The survey is intended to help employers review the adequacy of their current staff support measures and encourage more open relationships between stakeholders through improved communication and education.
Day one was rounded off with a RoPA update from Baroness Dianne Hayter, Deputy Leader of Labour Lords.
With thanks to our day one sponsor, ARMA Partner Insurety.
Day Two: Building Safety
The first session of day two saw Anthony Taylor of Revolve Risk discuss the new role of the Building Safety Manager (BSM) and what it means for managing agents. Nominated by the Appointed Person (AP), BSMs will oversee building regulations and the work of the AP. Anthony differentiated the roles of property managers and BSMs by explaining the specific competencies required of the latter. At times, a BSM may be spread across multiple buildings, and there may be a national register set up for them. Updated golden threads of information will also prove vital to the BSM’s role.
Giles Grover from the Manchester Cladiators, a co-founder of the ‘End Our Cladding Scandal’ group, highlighted the need for more open and transparent communication between managing agents and residents. He also stressed the need for clarity around Section 20 fees, emphasising this can be the difference between residents feeling certain and uncertain.
After, Nigel Sellars from RICS discussed the EWS1 form, reminding delegates that it is for valuation purposes only, and is not a replacement for a full safety risk assessment. He went on to walk delegates through the different EWS1 requirements for blocks over six-stories, five to six stories and those with fewer stories.
The third talk of the day saw Shaun Lundy of Tetra Consulting give an update on the Building Safety Bill, emphasising that, as Dame Judith Hackitt said in 2020, managing agents need to be putting the spirit of the Bill into practice before it becomes law.
The ensuing building safety panel touched on the benefits of proportionate action, reasoning that informed decisions made by competent individuals may help end the building safety crisis sooner.
With thanks to our day two sponsor, ARMA Partner Façade Remedial Consultants.
Day Three: Law and Redress
Cassandra Zanelli of PMLS started day three with an update on further measures introduced in relation to holding company meetings, while also noting that, at present, the Corporate Insolvency and Governance Act 2020 offering companies greater flexibility on the manner in which they hold meetings has not officially been extended beyond the March 30th deadline. Cassandra also covered the Debt Respite Scheme which may restrict agents and landlords from recovering debts that have accrued up to the date of notice of the moratorium for a period of time. Justin Bates of Landmark Chambers also offered further updates of cases involving disputes between managing agents and leaseholders.
Siobhan Fennell, from The Property Ombudsman (TPO) discussed the most common types of complaints the TPO had received over the last year. It had recorded a rise in complaint numbers and noted the toll on staff. Siobhan emphasised the need to clearly outline complaints procedures to all staff members and reminded delegates that it was a good idea to include an introduction to company procedures in staff inductions.
This need for clear communication was reflected by Sean Hooker of the Property Redress Scheme. Sean asked managing agents to treat valid complaints as constructive feedback, using the information to improve ways of working where possible.
Siobhan McGrath, a judge from the First Tier Tribunal, gave some tips on how to avoid facing the FTT, along with preparation advice for those who found themselves facing a hearing. A recurring theme was the need for a clear story. In a world where online information can prove almost infinite, the quality of evidence remains more important than quantity for those looking through cases. In addition, always think about a clear audit trial as this will make a case easier to put together. Finally, tribunals and courts should always be a last resort, owing to their cost and time implications, so parties should make sure all efforts of resolving a dispute have been exhausted before coming to the courts.
The day ended with a panel on redress lessons for managing agents. The TPO and the PRS reiterated the need for all necessary evidence to be gathered for a case in order for it to be dealt with appropriately and quickly. Non-cooperative parties may delay cases and lead to further penalties.
With thanks to our day three sponsor, ARMA Partner PLP Fire Protection.
Did you attend our Regional Briefings? Make sure you leave us feedback via our SurveyMonkey feedback email. All members will have access to slides and session recordings.
The Council of ARMA has now opened applications to appoint a full-time chief executive officer (CEO) to fulfil a strategic and outward facing role in delivering the overall direction, policy and plans for ARMA.
The CEO position has overall responsibility for the Association, reporting to the Association’s Council generally, and to the appointed officers and related committees specifically.
As you will be aware, the current CEO position has been a part-time role and ARMA has enjoyed great success as a result of Nigel Glen’s commitment as CEO over the last five years. However, the scope and demands of the role can no longer be met on a part-time basis, and for this reason a full-time position has been created and is now open for applications. Nigel has kindly agreed to remain within ARMA, and is seeking election as Executive Chair. He will be able to ensure continuity with the new post holder and provide invaluable support at the direction of Council.
For more information about the position, please review the detailed Job Description and Person Specification. For a confidential discussion about the role, or to apply, please email Michael Jacobs, ARMA Chair, on firstname.lastname@example.org.