… And sorting the crisis is made so much worse, say officials, because owners of building freeholds are anonymous, offshore and don’t co-operate
The most senior officials in the MHCLG concerned with the cladding scandal told MPs that they had no idea that some apartment blocks are at present uninsured.
They also had no details of the scale of the devastating waking watch costs – and other interim measure – that are falling on leaseholders, the Public Accounts Committee was told yesterday.
Although officials have long had responsibility for overseeing fire safety regulations, civil servants blamed “30 years of failure by industry” to build safe buildings.
“Regulatory failure as well,” added Labour MP for Birmingham Ladywood Shabana Mahmood, who is also a barrister.
Subject: Progress in remediating dangerous cladding Witness(es): Jeremy Pocklington, Permanent Secretary, Ministry of Housing, Communities and Local Government; Neil 0’Connor, Director, Building Safety Programme, Ministry of Housing, Communities and Local Government Subject: Progress in remediating dangerous cladding Witness(es): Jeremy Pocklington, Permanent Secretary, Ministry of Housing, Communities and Local Government; Neil 0’Connor, Director, Building Safety Programme, Ministry of Housing, Communities and Local Government
In the sharpest exchanges of the video conference meeting, Miss Mahmood also pointed out that three apartment blocks are without insurance. This is a figure that corresponds with LKP’s knowledge, although the exact number is almost certainly higher.
“I am not aware of any building that is without insurance,” said Neil O’Connor, the official who presides over a team of 200 officials dedicated to building safety.
“But I am aware of where there have been buildings which have had trouble getting insurance, and one case in Birmingham in particular.”
Miss Mahmood replied:
“You are aware of this case because it in my constituency and I’ve been writing to your department on many occasions.
“And it is without any insurance whatsoever. I’m surprised you do not collect any data on this.”
Mr O’Connor replied that his minister (Lord Greenhalgh) had met insurers to try to ensure that buildings are insured and at reasonable cost.
But Miss Mahmood pointed out that insurance premiums have risen from £30,000 to £530,000 on renewal: “These are not small amounts of money. What practical steps are you taking to help leaseholders who are stuck in this terrible situation apart from talking to insurers?”
There was no response to this. Officials are also aware of the impact of difficulties with professional indemnity insurance, which means there are few surveyors prepared to sign off EWS1 forms that a building is safe.
Both Miss Mahmood and the Public Accounts Committee chair Meg Hillier raised the issue of waking watch costs.
“Who’s taking steps to control the costs of waking watch and why isn’t the department finding out information?” asked Miss Hillier.
It was evident that the MHCLG is taking no steps to quantify or control waking watch costs. Officials simply opined that the sooner buildings are remediated the quicker these additional costs would cease.
MPs were also unimpressed by the “first come, first served” approach to the non-Grenfell cladding £1 billion fund.
Shabana Mahmood questioned why the fund, which closes at the end of this month, was not being allocated on the basis of risk: with buidings most at risk being remediated first. She also disputed whether the money was anywhere near enough, with figures of £10 billion to resolve the cladding crisis being in circulation.
The MHCLG permanent secretary Jeremy Pocklington accepted that there had been errors.
“While we have made progress on cladding, we have not made as much progress as we would have wanted. It is unacceptable that ACM cladding is on any building three years after the tragedy of Grenfell.”
Mr Pocklington laid the blame on building owners. He said:
“In the private sector the progress has been inadequate. At the heart of the problem is that too many building owners have not stepped up to their responsibility to make sure that these buildings are safe for leaseholders and for residents.”
And Mr Pocklington laid the blame on speculators in residential freeholds.
“We are dealing with incredibly complicated ownership structures, often overseas financial investors who really don’t have any interests in the welfare of residents or leaseholders. That has undoubtedly been a challenge that we are dealing with.”
Nonetheless, of 207 private sector buildings “freeholders and developers” are paying for 84 of those buildings, and warranties and insurance are funding another 23. In fact, no ground rent investor is paying at any cladding site to remediate the building.
“The sad reality is that our ability to seek redress from overseas financial investors is very very limited,” said Mr Pocklington.
The permanent secretary said that it was the MHCLG’s ambition is to start work on all ACM cladding sites before the end of 2020, and for all works to be completed by the end of 2021.
Mr O’Connor said that there had been three sites where evacuation had been necessary, and one where the building is no longer viable and will have to be demolished.
This may be the Citiscape site in Croydon, which has been evacuated, and where Barratt has so far spent £15.8 million