Aluminium Fenestration News

TECH TALK – BUILDING SAFETY – REMEDIATION FUNDING PROPOSALS – BY JUSTIN FURNESS, CAB SENIOR CONSULTANT

At a recent Construction Products Association (CPA) meeting to discuss remediation funding proposals, the government said it appreciated the work of the CPA to facilitate the current discussions, but it feared [justifiably so, it turns out] that product manufacturers were not going to meet the March-end deadline for voluntarily coming forward with a proposal to contribute to a levy. It said it wanted manufacturers to take the deadline seriously and appreciate that ministers felt this was a “last chance for a meaningful offer” from the construction products sector.

Perhaps most importantly, the government said that it was now expecting all cladding and insulation manufacturers to contribute to that meaningful offer. They said that the previous definition around what it describes as “problematic” products and materials was no longer appropriate in their view for the purpose of having industry contribute. The government’s view of a “polluter pays” model is based upon the Environmental Protection Act of 1990, whereby (in broad terms), if the company responsible for the pollution cannot be readily determined, the broader industry will then be expected to pay. This is not meant to infer fault or blame on those firms that were not involved in the original problem. A similar situation took place with a levy on financial institutions following the financial crisis.

If the industry does not make an offer voluntarily, government could create powers to block developers from starting work even where they have planning permission, and to stop new buildings being signed off as fit for use. ‘New Remediation Contribution Orders’ will be available to compel developers, partnerships and limited liability partnerships, and landlords to pay for remediation, thereby preventing them from “hiding” their liability behind complex company structures. Government is also creating new ‘causes of action’ to compel construction products’ manufacturers to pay to put right buildings that have been compromised by their products.

Indeed, Secretary of State the Rt Hon Michael Gove MP has now written to the CPA on 13 April, stating that he has: “…instructed my officials to do whatever it takes to make sure that construction product manufacturers are held to account through the powers that I am establishing in the Building Safety Bill. My new recovery unit will pursue firms that have failed to do the right thing, including through the courts. I will consider carefully how to use other powers at my disposal to make sure that there are significant commercial and reputational consequences for those firms that have not stepped up.”

In response to Michael Gove’s letter to CPA, CPA has replied, highlighting the difficulty in building a consensus amongst the construction product industry around some kind of funding model at this time, primarily because of several issues that government is best placed to address. An apparent lack of support from valuers, insurers and the mortgage sectors was also noted.

We will of course keep members informed as this situation develops.

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