Fire Safety Cladding: Heysmoor Heights

Jim Shannon Excerpts

Wednesday 16th May 2018 Commons Chamber

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

Today, following the campaigning of MPs across the country, the Prime Minister made a commitment to fund replacement cladding for some of the properties at risk following the Grenfell Tower catastrophe in June 2017. Her welcome statement refers to properties owned by councils and housing associations, but it leaves residents in privately owned tower blocks, such as those in Heysmoor Heights, Liverpool, out in the cold. They face bills of £18,000 to keep safe following the horrendous failings exposed by the Grenfell catastrophe.

After Grenfell, Heysmoor Heights was inspected by Merseyside fire and rescue authority—with commendable speed. It was found to have dangerous ACM— aluminium composite material—cladding. Fire marshals were put in place, and all lethal cladding has now been removed and is being replaced.

Heysmoor Heights is a 16-storey block comprising 98 flats, 63 of which are owned by Grainger plc. Grainger has funded the costs of fire safety measures for its flats, but it is unclear whether those costs will be reflected in higher rents or service charges in the future. The private leaseholders face major problems and anxiety. Theirs are modest properties, with a value of between £80,000 and £100,000, yet they are required to pay £18,000. How can hard-pressed residents find £18,000? Is the value of their flats affected by what is happening? Will more work be required, thus requiring more funding? It is unjust for residents to be facing demands to foot the bill to keep them safe because the regulatory system failed.

[Jim Shannon (Strangford) (DUP)]

First, I congratulate the hon. Lady in raising an issue that is gripping the House this week. Does she agree that every social housing provider, local authority and landlord who is paid from the public purse has a duty of care and must ensure that buildings are up to the highest safety standard; and that where that is not the case, they must carry out the work necessary to bring the building up to that standard? That should be their responsibility.

[Mrs Ellman]

I agree with the hon. Gentleman; he makes an important point. Who should pay? Who is responsible for putting the situation right? The position is obscure and complex. The original development company, FM Heysmoor Heights Ltd, was dissolved in August 2014. It went into administration in 2010 after building renovation works were completed.

The current freeholder is an anonymous beneficial owner: Abacus Land 4 Ltd, an offshore company based in Guernsey. It is part of the Long Harbour Ground Rent Fund, which is thought to be worth £1.6 billion. HomeGround is responsible for the day-to-day management of the company. It has appointed the Residential Management Group—RMG—to manage the block.

RMG tells me that an insurance claim—taken out in 2008 by the now defunct FM Heysmoor Heights Ltd—is currently being pursued with Lloyd’s against the original build guarantee. That could see an insurance warranty meet some or all of the costs incurred, but we do not know if this will happen.

RMG first raised the claim on 18 October 2017, but no decision has yet been reached. The claim has now been submitted to the formal complaints process via the Lloyd’s underwriter. When will there be a response? Will it be adequate? There are no answers in sight to those important questions.

The public inquiry into the Grenfell disaster is not due to start until next week. Indeed, there is still dispute about how it will proceed. A separate investigation into building regulations—the Hackitt inquiry—is due to report soon, and I understand that there may be a statement on that tomorrow.

Those investigations involve complex issues, including safety assessments, warranties, installations, certification and regulation. They could include questions of criminality. Years could pass before legal culpability in relation to any individual property is established but, in the meantime, my constituents face bills of £18,000. Payment by instalments is being offered in some cases, and sums of around £2,000 are being added to the quarterly service charge for some individual residents. That is an enormous amount to find. The situation is highly stressful, and payment by instalments does not reduce the size of the bill, which remains £18,000.

I have campaigned strongly on this issue on behalf of my constituents, as have other hon. Members on behalf of theirs. I first raised the matter with the then Secretary of State in October 2017. His response, dated 11 December 2017, stated:

“Where costs do not naturally fall on the freeholder, landlord or those acting on their behalf I urge those with responsibility to follow the lead of the social sector and private companies already doing the right thing and not attempt to pass the costs to leaseholders”.

I have continued to pursue that important matter in the House and I have made further representations to the Minister.

The Minister told me this week in a letter, and in an answer to a written parliamentary question, that

“the morally right thing for building owners to do is to take responsibility for meeting the cost of remediation and interim safety measures without charging leaseholders”,

and that

“building owners should do all they can to protect leaseholders from paying these bills. This could mean funding it themselves or funding it through warranties or legal action”.

The residents of Heysmoor Heights cannot wait for long and potentially protracted negotiations with the insurance company to be resolved. There is no guarantee that a satisfactory solution will be reached.

A letter I received today from HomeGround confirms that, should the insurance route fail, costs will be recovered through increased service charges. That is simply not good enough.

The Minister tells me that he will speak to the agent of the freeholder at Heysmoor Heights. Will he attempt to establish the identity of the owner—or owners—of the offshore Abacus Land 4 Ltd, an anonymous beneficial company?

There has been a further recent development. Barratt Developments, owners of Citiscape in Croydon, have now agreed to pay the costs of cladding removal and fire safety measures for their residents. The Minister’s letter to me states:

“I am aware of some private sector building owners who are not charging leaseholders and, as you know, the previous Secretary of State urged others to follow suit”.

I call for the same treatment for the residents of Heysmoor Heights. What is good enough for the people of Croydon is good enough for the people of Liverpool.

Let us remember what all this is about: 71% of people at Grenfell Tower lost their lives because of grotesque failings in fire safety. Inquiries are yet to establish precise liability and culpability. The catastrophe at Grenfell exposed the danger in other high-rise buildings, including at Heysmoor Heights, yet it is the residents who are being asked to foot the bill to protect their safety in a situation they did not create.

Today, the Prime Minister bowed to the inevitable and agreed to refund the cost of replacement cladding for councils and housing associations. The campaigns throughout the country have been successful, but residents have been put through too much stress for too long. What about the situation for the private residents—the leaseholders—at Heysmoor Heights? The Prime Minister did not give any answer to their calls for help. They must not be abandoned. I call on the Government to act to ensure that residents do not foot this bill—it is a question of justice.