By using this website, you agree to our use of cookies. Click here to view our Cookie Policy. OK Home About Us Our Projects Cladding Current Page: News Contact Us What next for the cladding crisis? 7 Apr Will the Government boost the Building Safety Fund? The cladding crisis has taken many twists and turns ever since it became apparent in 2017, with the updated EWS1 guidance from the Royal Institute of Chartered Surveyors representing the latest major development. Eye-watering revelations relating to the government and industry’s role in the crisis are becoming more common as the public rightly express their desire for a swift and long-lasting solution. So how can we expect things to play out over the next year? EWS1: reason to be cheerful or fearful? The updated guidance from RICS, which aims to reduce the onus on leaseholders to provide fire safety certificates, has been met with broad enthusiasm. It’s easy to understand why, given their prohibitive role in housing market transaction volumes and increasing reports of fraudulent activity. Discussions on the problems that could arise as a consequence, however, have been subdued. Is there a case to be made that the long term impact might not be so rosy? Its still unclear whether buyers and lenders will be happy to put their faith behind a building which, up until a few weeks ago, had unsafe written all over it. Removing the requirement for a certificate doesn’t remove its fire safety threats and it would be a rather expensive calamity if this were to become apparent to the new buyer at some point in the future. There is no reason why, with the discovery of new fire threats as the conversation and regulatory environment evolves, a hefty bill could arrive on their doorstep. Such a scenario would be symptomatic of the industry’s current approach; pursuing quick fix solutions with an inadequate understanding of the long term consequences. We’re just getting started The national conversation has been going on for the best part of three years now, yet remedial works haven’t even started yet. So as the allocation of BSF funding gathers pace and projects begin taking shape over the next year, the arrival of new funding, legal and logistical challenges is inevitable. Insufficient private Indemnity Insurance, the true cost of cladding remediation and practices relating to Building Safety Fund submissions are just but a few of the pre-eminent concerns threatening to derail meaningful progress. Government and industry professionals would be wise to ramp up discussions of them as a means of pre-emptive action. Will the government dip into its pockets? It has become abundantly clear that the government’s £5bn Building Safety Fund will represent but a drop in the ocean when it comes to financial backing for the crisis. In fact the HCLG select committee’s recent estimate of £15bn doesn’t scratch the surface either. Latest figures from MHCLG reveal that some 54,000 buildings will be subject to ESW1 assessments and we’d expect a good deal of those will require some form of remedial works. Our projection puts the total figure at closer to £50bn, which is almost a third of the construction industry’s total annual output. So who’s going to pay? Government have seemingly set their sights developers and leaseholders in sub 18m buildings and the response has understandably been one of both anger and confusion. Additional taxes on housebuilders in the midst of a housing crisis seems counterproductive at best, whilst some leaseholders could be facing bills of up to £75,000 and 83 years of loan repayments. Over the next year, we’d expect to see significant changes relating to the allocation of payment responsibilities as the true cost of remediation becomes clearer. At the very least we’d expect to see the BSF topped up. The true cost of cladding remediation will reveal itself Empirical evidence suggests that initial Phase 1 submissions to the BSF have often been flawed. We’ve witnessed some contractors quoting budgets as much as three to four times too small. These budgets fail to truly reflect the full scope of works, the logistical challenges, rising costs of materials and scarcity of resources. Unfortunately they’re being devised by those who don’t have the experience or expertise in cladding remediation. Basic Asset Protection Agreements, water courses and internal structural works are a few of the major and crucially, expensive challenges that we’re seeing appear all too often yet go amiss when it comes to quoting budgets. Such scenarios are increasingly coming to light across the country and they need to be addressed now. If they’re not, the inevitable legacy will be one of half done jobs and a wave of re-tendering processes. That means further delays and further costs. Who’s going to pay for those? Moving forward The cladding crisis is one of the major issues of our time. Quick-fix approaches which seek to minimise expenditure and timelines will create more problems than they solve. Serious discussions around the true cost of cladding remediation (and meaningful answers to that) as well as fast track training and development for specialist designers and fire engineers are the legacy-defining steps we must take. 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