Safety and sustainability and the cladding crisis

Ross Gissane, director of lenders and investors at Arcadis.

Following the secretary of state for housing, communities and local government’s announcement of an additional £3.5bn for replacing dangerous cladding, Ross Gissane of Arcadis offers some salient thoughts on the issue.

An Englishman’s home is his castle, but what happens when that castle is surrounded by £15bn of potentially unsafe cladding? That’s the scale of the crisis we’re looking at, with up to 1,700 buildings potentially requiring remediation over the next ten years. It’s a big problem, and one that the government is only just realising the full extent of. 

The announcement of an additional £3.5bn for replacing dangerous cladding is clearly a positive step. But from a practical perspective, it perhaps raises more questions than answers. If cladding is found to be unsafe, what should go up in its place and will this be government mandated? Who should take responsibility for rectifying issues, from planning to ongoing fire maintenance?

Let’s focus first on the positives. The government takes the issue seriously and recognises that it must intervene to protect both the safety and the finances of homeowners and occupiers. Its access to funding is not infinite, and its intention to recoup the cost of intervention from a tall building levy and further taxes on housebuilders is fiscally prudent – providing, of course, that costs are neither passed onto future customers nor end up challenging the viability of development.

However, we also need to make sure that the root of the problem is being addressed and this means looking at fire safety issues that extend well beyond cladding. For future development, fire safety legislation currently under consideration should address many of the root causes. Many existing properties are affected by a much wider range of defects, and there should be further mechanisms in place to ensure that replacing cladding is just one step in fixing these buildings and allocating responsibility. 

There are potentially thousands of properties which might not have any defects but are still deemed un-mortgageable or uninsurable purely as a result of not having an EWS1 form. The ability of residents to obtain these forms has been choked by a lack of insured inspectors, and so the Ministry of Housing, Communities and Local Government’s latest announcement is a clear step towards unblocking the market. Providing a state-backed indemnity scheme for qualified assessors who are unable to obtain professional indemnity insurance for the completion of the EWS1 form will be a huge step forward when it comes to giving owners, investors, insurers and mortgage providers the clarity they need.

Thinking specifically about the net zero challenge, it is worth stepping back to think about whether the recladding programme can be aligned to the UK’s net zero commitments. In new build housing, the idea of net zero ready housing is already well established. A remediation on this scale will take time and it is inevitable that, at some point, enhanced building regulations such as those proposed in the Future Homes Standard will apply. Looking even further ahead, the homes that are caught up in the cladding scandal will, in future, need to achieve minimum EPC standards to be marketable.  Shouldn’t this work be done in one go? 

Ensuring public confidence in the safety and standards of the buildings they live in has to be of paramount importance for our industry.  Industry and government have a long way to go to restore confidence, with the design and implementation of building safety measures likely to take years.  

This latest announcement is a step in the right direction – addressing some of the worst fallout from the Grenfell tragedy. But the measures are for repairs only and far more needs to be done to address systemic faults. They are essential measures but will not solve a crisis that has been building for decades.  

Ross Gissane is director of lenders and investors at Arcadis.