The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
My Lords, with the leave of the House I shall now repeat a Statement made earlier in another place by my right honourable friend Michael Gove.
“Mr Speaker, with your permission, I would like to update the House on the progress we have made in securing commitments from developers to remediate properties with building safety defects. Last year, the major housebuilders signed a pledge to fix all the medium or high-rise buildings that they had built or refurbished that were unsafe. The developers also promised to reimburse the taxpayer for work already undertaken at government expense.
This Parliament has always been clear that those with ultimate responsibility for those buildings should bear the cost of remediation. Innocent leaseholders, who are neither responsible for safety defects nor equipped with the resources to fix the problem, should not be on the hook. Those who are responsible must pay. We have worked with developers to draw up a contract that gives direct effect to the pledge that they made. I was and remain grateful to those developers who have been so keen to live up to their obligations, and to Stewart Baseley of the Home Builders Federation for his skilful work in supporting the commitments made.
We published the legal contract on 30 January 2023, and I gave an initial cohort of developers six weeks to confirm that they accepted the list of buildings for which they take responsibility and then to sign the contract. That deadline expired yesterday. I can today confirm that 39 developers have signed the contract. We have published a list of those developers on GOV.UK and hard copies of that list have been shared with the Vote Office. By signing the contracts, those developers have committed to fixing at least 1,100 buildings. They will invest more than £2 billion in that work—money saved for the taxpayer and money invested in giving leaseholders a brighter future. I thank those developers for their hard work and co-operation in helping us to right the wrongs of the past. They are making significant financial commitments and I am grateful to them.
Leaseholders who have been waiting for work to be done to make their building safe will rightly want that work to start without delay. I know that those responsible developers who have signed the contract understand that expectation and will be in touch with leaseholders to set out the programme of expected works as soon as possible. I take the opportunity once again to apologise to those leaseholders and others who have waited so long for this work to be done. While there is still much to do, I hope that today shows that your campaigning has not been in vain.
While the overwhelming majority of major developers have signed, some regrettably have not. Parliament has made clear what that means, and so have I. Those companies will be out of the housebuilding business in England entirely unless and until they change their course. Next week I will publish key features of our new responsible actors scheme, a means of ensuring that only those committed to building safety will be allowed to build in future.
Those developers who have been invited to sign the remediation contract, but who have not agreed to live up to their responsibilities, will not be eligible to join the responsible actors scheme. They will not be able to commence new developments in England or receive building control approval for work already under way. The House should note that the companies invited to sign the remediation contract that have not yet lived up to their responsibilities are Abbey Developments, Avant, Ballymore, Dandara, Emerson Group—Jones Homes—Galliard Homes, Inland Homes, Lendlease, London Square, Rydon Homes and Telford Homes.
While my officials remain in discussions with several who are making progress towards signing, I am concerned that some companies do not appreciate the grave nature of the responsibility they bear. I hope the directors of those firms will now exercise the same level of responsibility as the leaders of the building industry. The reluctance so far of some companies to sign up only underlines the need for the responsible actors scheme. It will ensure that there are consequences for developers who wish to be neither answerable nor accountable.
I will also take other steps to ensure that companies live up to their responsibilities. I will be writing to major investors in those firms to explain the commercial implications of their directors’ decisions. I will write to local authorities and building inspectors to explain that those developers’ projects may not be started or signed off. I will notify public bodies to be prepared to reopen tender award processes or rerun competitions. House buyers will want to know what that means for them. We will formally set out the risks involved in purchasing homes from companies that have chosen to ignore the prospect of prohibitions.
The course of action that I have set out today is a significant intervention for any Government, but the magnitude of the crisis that we faced and the depth of the suffering for those affected clearly justified a radical approach. To their credit, the leaders of the development industry willingly accepted the need for action. The vast majority of developers have made undertakings to the British public to put right the wrongs of the past. We can now work together on making sure that we deliver more safe, affordable, decent homes for the country.
As they have rightly argued, we will do more to pursue freeholders who have yet to live up to their responsibilities, and construction product manufacturers, who also bear heavy responsibility for unsafe buildings. I will have more to say in the days and weeks to come. For the many thousands of people whose lives have been blighted by the failure properly to address building safety in the past, today’s update brings us another step closer to resolving the issue, and for that reason I commend this Statement to the House.”
That concludes the Statement.
Lord Stunell (LD)
My Lords, I thank the Minister for the Statement that she has repeated. On this side, we welcome it and the determination shown by the Secretary of State to deliver the outcomes that he has reported.
We welcome the decision of the leading housebuilders to put their shoulders to the wheel, to make things happen at long last and to relieve the anxiety and stress of many innocent householders. Surely the Home Builders Federation—an organisation that I do not always see eye to eye with—and Stewart Baseley should get a mention for facilitating the process in a very difficult climate.
There are some big buts, however. The firms named in the Statement are failing to deliver their fair share of the massive costs of remediation. That is disgraceful. We endorse the action that the Secretary of State proposes to take to limit their capacity to cause more damage and heartbreak in the future. I appeal to those firms, even if they do not recognise their duty to society or to the families that they have traumatised, to at least now recognise their duty to their shareholders, and to get their pens out and get some signatures on paper PDQ. I note that, in the Statement, the Secretary of State is very much of the same opinion. I assure him that there will be a unanimous view across this House, urging him to get on and achieve that.
We should also recognise that, even after five years, this horrific saga is not over. This settlement is welcome but only partial. There remain, and will still remain, many families traumatised by the terrible failures right across the country which were exposed by the Grenfell inquiry.
Those terrible failures are now for the building industry to rectify. The industry has built homes that should have been places of security but were in fact death traps and that should have been places of warmth and comfort but instead have been left uninhabitable and unsaleable.
When can we expect to see the defaulting contractors finally accepting their liability and playing their proper part in helping desperate families to rebuild their lives? Will the Minister give noble Lords a timescale for further action and some hope for those families left stranded now for five years and growing?
The Statement says this programme will fund repairs for 1,100 buildings. How many homes are in those buildings? What assessment has the Secretary of State made of the gap between this programme of restitution and the enormous further cost of repairs still outstanding on building after building across the country which are not covered by it? How do the Government plan to close that gap? How many homes will remain unrepaired after this scheme comes to its end?
Finally, I will ask the question I know my noble friend Lady Pinnock would ask if she had been able to be here. Do Ministers still stick to their promise that not a penny of the costs of restitution will fall on the families who live in these homes—the completely innocent victims of this tragic episode? If Ministers do still stick by their word, when will we be told how that promise is to be delivered?
Baroness Scott of Bybrook (Con)
My Lords, today’s announcement is an important day for thousands of leaseholders living in buildings afflicted by fire safety defects. The Secretary of State announced that 49 developers had pledged to take responsibility for remediating unsafe buildings that they developed over the past 30 years. The pledge committed them to fix life-critical fire safety defects and reimburse the Government for grant funding paid out on their behalf to fix their buildings.
I had a lot more to say, but because of the late time I will just answer noble Lords’ questions—I am sure they will be happy with that. The most important thing is the impact that this will have on leaseholders and residents. They are the most important people in this. Once signed, the contract requires developers to take responsibility for addressing all life-critical fire defects arising from the design and construction of buildings over 11 metres in England and that they have developed or refurbished over 30 years. The developers will be expected to keep residents in those buildings informed of progress towards meeting this commitment. Monitoring and auditing provisions will ensure that the Government will hold developers to account to make sure that they are completing the work properly and at pace.
Talking about pace, we expect the developers to remediate their buildings at pace at all times. Some developers have already started assessing and remediating buildings, which is very welcome. Under the contract that we published this week, developers will be required to set out their plans to identify, prioritise, assess and fix defects as soon as reasonably practical. We will hold those developers to account to make sure that they are completing the work properly and at pace. Developers will be required to report to the department quarterly on progress against their remediation plans and to keep those leaseholders informed of that progress as well. That is an important part of the system.
Another part of the system that is important is the recovery strategy unit that we are setting up. We are further cracking down on those who fail to do the right thing and pay to fix building safety issues through a new recovery strategy unit. The unit is dedicated to pursuing firms that have failed to do the right thing and pay to fix the problems that they have created. It will take forward the most serious cases, holding the worst actors to account and delivering for leaseholders where other routes are not available. There will be some that fall outside all the issues that we have talked about, and the unit will be there to follow those cases. The unit contains an intelligence function to help to identify such cases, which is important. I am happy to say it is being run by Colonel Cundy—who sounds the right person to do it—and it is very happy if any Peers would like to be briefed on the work it is doing, because that is an important piece of work.
Noble Lords have asked about those not signing the contract. It is quite clear that if you fail to sign the contract and comply with its terms then you will not be able to operate freely in the housing market in this country, and more details of that will come out. The Government are committed to laying regulations under Sections 126 to 129 of the Building Safety Act 2022 to implement a responsible actors scheme for residential developers, supported by a system of building control and planning prohibitions that will impose serious consequences on eligible developers that do not sign up.
Both noble Lords said that they would support a robust response to this issue. I do not think I need to assure them that the Secretary of State can be very robust when he wants to be, and he will be very robust over this. He is passionate about the fact that those people should be doing the right thing for the people who live in the houses that they built which were not up to standard. I assure noble Lords that everything will be done, and more information will come out in the next weeks that will add to this Statement today. This is just the first Statement that needed to be made, because the Secretary of State promised he would let people know as soon as the six weeks were up.
I know that the noble Baroness, Lady Pinnock, would have wanted me to mention buildings under 11 metres in particular. It is generally accepted that life safety risk is proportional to the height of the building, as the noble Baroness knows, but a fire risk assessment and a fire risk appraisal of external walls conducted in accordance with the PAS 9880 principle will often find that lower-cost mitigations are more appropriate in low-rise buildings. We stress again that the responsibility for the costs of fixing historic building safety defects should rest with the building owner. They should not pass those costs on to leaseholders but should seek to recover them from those who were responsible for building unsafe homes in the first place. It is important that any leaseholders in this situation look for support and information on how to ensure that those responsible for their unsafe houses get in touch. I know that many people in this situation have written to the department and are being supported by it. That is an issue, and I thank the noble Baroness, as always, for bringing it up.
I hope I have answered most of the questions. If not, I ask noble Lords to let me know. I will go through Hansard in the morning, but I think the major issues that noble Lords have brought up have been answered.
Baroness Brinton (LD)
My Lords, along with other noble Lords, I thank the Minister for the Statement. It is a positive step forward, but only a partial step. The Minister referred to my noble friend Lady Pinnock and her concerns about buildings under 11 metres. I also want to highlight those that are the responsibility of non-major housebuilders. Earlier today, in Grand Committee, we talked about the 13,000 high-risk high-rise buildings, yet this Statement talks only about
“fixing at least 1,100 buildings.”
I am not expecting answers, but I am concerned about how many smaller builders there are—they may still be big builders by many business standards, but they are not the major developers. Will they also have to sign a contract as part of next steps?
I think that both my noble friend Lady Pinnock and I completely understand that the death rate in fires at lower levels is, thankfully, lower, but homes are still destroyed, and the same poor products have been used. What are the Government going to do about those?
The other point that I know the residents of those buildings will talk about is the excessive insurance charges they are being forced to pay at the moment. Are the Government planning to talk to the insurance companies in the same way they have been working with the major housebuilders? Again, it is not the fault of the tenants and residents of these high-rise blocks that they should be faced with those bills, and I wonder whether perhaps there could be some help there.
Finally, the Secretary of State said in the Statement that these would be dealt with on a case-by-case basis—but there are thousands of buildings. Do the Government have any idea how long it is going to take to respond to this? Are we going to have quarterly Statements in the future? It will be enormously helpful if we are, but I am worried that it is easy to think that because we are dealing with big companies, everything is resolved. It absolutely is not.
Baroness Scott of Bybrook (Con)
I can assure the noble Baroness that some of these companies in the list that we have seen today are not the large companies. That, obviously, is causing some of the smaller companies to need a little more support, because it is more difficult financially for them to sign up to the financial costs of this. We are working with them on ways they might be able to pay back. We are not giving them any money for the future, but the Government have already paid for some of the payback of remediation work; we are helping them with payment schemes if that helps.
There will always be other companies, and that is why we are always saying that this is not the end of the system. This is the beginning, and the department will keep going until we make sure that no leaseholder is in the position that they have been in over these years.
As for the signing of the contracts, there are 4,000 buildings owned by those companies, of which about 1,000 have life-critical fire safety defects. We have to be careful with the figures, because they may be responsible for many more properties than actually have any problems. That is an important issue.
As far as insurance is concerned, yes, the department has been working with the FCA and the insurance companies over a number of months, if not years, because we are well aware of this issue, and we will continue to work with them. Particularly now that we are getting a solution to it, there is absolutely no need for these insurance issues at the moment.
Was there anything else? There was nothing on PEEPs tonight.
Baroness Brinton (LD)
I thank the Minister. She answered my question, and I look forward to hearing from her on PEEPs in the future.
Baroness Bennett of Manor Castle (GP)
My Lords, I have three interrelated questions, and I am going to relate them to the 1,100 buildings mentioned in the Statement, not the rather breathtaking figure from the noble Baroness, Lady Brinton, of 13,000 buildings. The Statement rightly says that leaseholders will want work to start without delay on all 1,100 buildings, which are, by definition, significant buildings. Are the Government confident that there are sufficient skills and ability, as well as the sheer workforce, to deliver this in any meaningful kind of timeframe?
Although most of the focus since the awful tragedy of Grenfell has been on external wall systems, there are also huge and quite complicated problems that have been discovered with fire-stopping systems, particularly breaches of compartmentalisation in the way buildings have either been designed or built. Fixing that is not going to be a simple matter of taking some cladding off and putting some cladding on; it is going to require a very high level of skills to make sure that you are genuinely fixing the problem and not, goodness forbid, making it worse.
In that context, the Health and Safety Executive recommended the golden thread principle, which I think probably applies here, of ensuring that there is a responsible person who is in control, really understands what is happening and has all the necessary documents and understanding.
I also note that this week the consultation closes on what is known as approved document B, which is the new and improved iterative process of fire safety standards. That is only going to apply to new buildings and will not affect existing buildings. Are the Government really committed to ensuring that we get the best possible standards in these buildings? People have now been living in fear for years, and they need the confidence to know their buildings are as safe as possible.
Baroness Scott of Bybrook (Con)
Skills is an interesting issue. As I said to the noble Baroness, Lady Hayman of Ullock, we expect developers to remediate these buildings at pace and we will be on their backs to do that. They also need to be doing the work properly. To that end, we will be checking the quality as well as how quickly they have done it. We will be checking it for two years after the work as well, so that we make sure that it has been done to the highest possible standard. Obviously, if the sector brings up skills as an issue, then we will have to look into it and deal with it. As far as I know, we have not been told as yet that there is going to be a skills shortage for this.
On the accountable person, the noble Baroness is absolutely right. We are looking at the regulator and we have just today put through some SIs about accountable persons. They are going to be critical because they are going to be the people in these buildings who are responsible to the regulator to say that they are going to do everything that had to be done, monitored and checked under the Fire Safety Act. We put the SI through today and, once those regulations come into force, I think we will have a much better idea of what is happening in all of these high-rise, high-risk buildings.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, I first declare some interests. I am chair of Heart of Medway Housing Association. I am also a director of MHS Homes Ltd and a vice-president of the Local Government Association. I am also a leaseholder but am not in any way affected by the issues discussed.
It has been five years and nine months since the dreadful Grenfell Tower fire where 72 people lost their lives. While the Statement from the Government is welcome, you could not accuse this Government of acting in haste. It has been five years and nine months we have been waiting for this. There has been progress, yes, but progress has been slow, and I think we need to put that on record.
I was pleased with what the Government said. Looking at the list of developers which have not signed the contract, I think it is a list of shame. I hope the noble Baroness will take back to the department that, when considering next steps, every possible avenue should be thought through. What we do not want to happen is that company X becomes company Y and just changes its name. We need to go after the individual directors as well because, unless people understand that it will affect them, they will find all sorts of reasons to get around it. Frankly, not to have signed this contract is an utter disgrace. I am sure that the department will be doing that as well.
I was really pleased to learn about Colonel Cundy. We have a Special Forces commando now coming to lead on this, which is wonderful. Could we arrange for Colonel Cundy to come the Lords, to give Members a briefing on what he is doing? It would be really good to hear that; it would be really interesting for us all.
I often raise general issues about leasehold in, for example, houses. All the terrible things that people have experienced in these blocks—the appalling bills, stress, worry, hearing from nobody; the general bad behaviour from developers, freeholders and managing agents—all comes round again to the issue of leasehold reform. I know that it is a wider issue, but we have to get it sorted out. I cannot get an answer from the Government—I keep asking—on this issue. Will the leasehold Bill, which we have yet to see, but which is coming down the track, be a Bill to reform or abolish leasehold? I cannot get that question answered. I know that I will not get an answer tonight—maybe I will be surprised—but it would be really great to know what the Bill will do when it comes.
Baroness Scott of Bybrook (Con)
First, I say that I absolutely agree, and the Secretary of State agreed. He said in his Statement today, as he has said in many Statements, that it has been too long, but we are where we are and we are getting on with it, and we will move forward with pace. I think that he has done that since he has returned to the department.
As far as those who have not signed, we have not given up on them. We are still working with them, and we are serious about that. The Secretary of State named and shamed them today, and we will stop them building any more houses in this country if they do not stand up to their responsibilities.
On leasehold, I can only quote my right honourable friend the Secretary of State, who has set out his intention in the Commons to bring the outdated and feudal tenure of leasehold to an end. I cannot give the noble Lord a date, as he knows, and I will probably say that again many times here before I can. But, honestly, for me it will be the best day ever, when I can stand up here and give him the date for the leasehold reform Bill. As I have said before, it is a manifesto commitment, and we intend to introduce it by the end of this Parliament.
Lord Kennedy of Southwark (Lab Co-op)
I will come back to the Minister on that point, because I cannot get this clear. One moment, she said that the Government will end the outdated system of leasehold—I agree with that; that is very welcome—but then she talked about the leasehold “reform” Bill. I do not understand that. Will the Bill reform or abolish leasehold? A reform Bill is needed too, so I do not mind which it is, but I cannot get a clear answer. I read the material in the House of Commons, I read the material in the Sunday Times, and I watched Michael Gove’s interview on Sky News, but they are all saying different things. I cannot get a straight answer to a straight question. Will the Bill reform or abolish leasehold? That is all I want to learn. I know that she cannot tell me when it will come, but I would like to know what will be in it.
Baroness Scott of Bybrook (Con)
Until we know when it will come, we will not know what is in it, will we? What I can say is what I have said before: it is really important to understand the complexity of this matter. Building a house is different for leasehold, as the noble Lord knows, and we have very few leasehold houses now being built and sold. However, when you get to flats—to make commonhold work for flats— government, industry and consumers must all work very closely together. It is very complex, and it will take time.
Lord Kennedy of Southwark (Lab Co-op)
I will make one final point. As the Minister knows, I have a Question on this issue coming up before we break for Easter. Could she please go back to the department before then? I will ask the same question again, so I hope to get another answer.