Fire Safety Cladding: Heysmoor Heights

Louise Ellman 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.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jake Berry)]

I thank all hon. Members for their contributions, and I thank the hon. Member for Liverpool, Riverside (Mrs Ellman)—Liverpool is my home city—for the extraordinary campaign she is fighting on behalf of the local residents she has the privilege to represent. She has asked written and oral parliamentary questions, and has now secured this important debate.

As the hon. Lady mentioned, my hon. Friend the Minister for Housing has arranged to speak to the agents of Heysmoor Heights’ freeholder, and I will certainly ask him to ask the agent who the freeholders are, because she has highlighted a very serious issue. We cannot have a situation in which the residents simply do not know who their superior landlord is. That would not have been acceptable to me in my old job as a property lawyer. I shall make sure that the Housing Minister presses very hard on that issue, and that if an answer is received, it is passed on to the hon. Lady so that she can forward it to her constituents.

[Mrs Ellman]

Does the Minister agree that it is outrageous that the residents are being asked to pay this bill but the private leaseholders do not know the freeholder’s identity? When the Housing Minister speaks to the freeholder’s agent, will he ask the freeholder to foot the bill?

[Jake Berry]

The ownership of property is of course subject to the public record. I suspect that the hon. Lady may be getting at the fact that even when the Land Registry has a name on the register, it is sometimes tied up with foreign companies in jurisdictions that do not have the same transparency rules that we have for our companies. I will absolutely ensure that my hon. Friend the Housing Minister presses for the answer to who the freehold owners are. On her point about asking the freehold owners to pay the bill, I hope that the hon. Lady will hear in the rest of my speech the approach the Government are going to take.

Before I deal specifically with the hugely important issue of the residents of Heysmoor Heights, I wish to discuss the wider debates we are having in Parliament this week about the terrible tragedy at Grenfell Tower, which the hon. Lady touched on. This is the first opportunity I have had to speak about those tragic events, and I wish to put on record my personal sorrow. The Government remain absolutely determined that this should never happen again. It should never have happened in the first place. I think everyone in the House would agree that we have a duty to work together to ensure that a tragedy on that scale is never repeated.

Following the fire, the Government’s first priority was quite rightly to help the families who were affected and enable them to rebuild their lives, while continuing to remember with great respect—as we have already today—the people who lost their lives in those tragic events.

The impact of the Grenfell fire is wide-reaching, and I can assure the House that the Government are absolutely determined to learn the lessons and to take all necessary steps to ensure the safety of residents now and in the future. Earlier today, my right hon. Friend the Secretary of State set out how the Government continue to work with fire and rescue services, local authorities and landlords to identify high-rise buildings with unsafe cladding. That enables us to both ensure that interim measures are put in place with our partners and give building owners clear advice about what they need to do, over both short term and the longer term, to keep their residents safe.

To support that, we have appointed an expert panel to take the necessary steps to ensure the safety of residents of high-rise buildings. Following its recommendations, the Government provided advice to building owners on the interim measures that they should put in place to ensure the safety of their residents. I note that the hon. Lady said that the ACM cladding has already been removed from the building as part of those interim measures. We swiftly identified social housing blocks and public buildings with unsafe cladding, and all the affected social sector buildings that we have identified now have these measures in place.

In parallel, we tested different combinations of cladding and insulation to see which of them meets the current building regulations guidance. We published consolidated advice in September confirming the results of those tests, together with further advice for building owners. At the same time, we asked Dame Judith Hackitt to undertake an independent review of building regulations, and we are taking forward all the recommendations for Government from her interim report and look forward to the statement tomorrow about the final report to which the hon. Lady referred.

We believe that we have identified all affected social housing blocks and public buildings. With regard to private sector buildings, which tonight’s debate is about, the Government have made their testing facilities available free of charge, and we continue to urge all building owners to submit samples for testing if they think that they may have unsafe cladding on their building.

In addition, we wrote to local authorities in August asking them to identify privately owned buildings in their area with potentially unsafe cladding and reminding them that that was in line with their statutory duty to ensure that residents are kept safe. The majority of local authorities have recognised the urgency of that work and have provided relevant information to the Government. I wish to put it on the record that we are grateful for all the hard work that local authorities have done in this regard.

We have been in constant and close collaboration with local authorities ever since the Grenfell fire tragedy, but this is not a straightforward task, particularly in cases such as the one referred to by the hon. Lady where building owners either cannot be traced or are proving unresponsive. To support local authorities in this work, we announced in March a financial support package of £1 million to assist the most affected local authorities.

Our measures will also help local authorities to take enforcement action to ensure that hazards in residential buildings in their areas are remediated as quickly as possible. I can assure hon. Members that, as soon as we are notified of buildings with potentially unsafe cladding, we will work with the relevant local authority and the National Fire Chiefs Council to ensure that interim measures are put in place.

[Mrs Ellman]

The Minister is giving some very important information, but he is not addressing the central issue of this debate. What will happen about the £18,000 bills that the private leaseholders at Heysmoor Heights are facing? What will the Government do about that?

[Jake Berry]

The hon. Lady referred to the announcement by my right hon. Friend the Prime Minister today of £400 million of new Government funding to help local authorities and housing associations focus their efforts on removing ACM cladding. We have also provided other financial flexibilities for local authorities that need to undertake other essential fire safety work. As she has asked me very specifically to address the issue of the private sector, let me tell her that, in the private sector, we continue to urge those responsible to follow the lead set by the social sector and not to attempt to pass on the costs to residents. They can do that by meeting the costs themselves, or by looking at alternative routes such as insurance claim warranties and legal action.

Although I do not want to be drawn into the specifics of the insurance claim that is going on regarding Heysmoor Heights, I echo the hon. Lady’s call for Lloyd’s to get on and process that claim as quickly as possible. She mentioned the stage of the process that the claim has reached. As she correctly points out, it is the uncertainty—the £18,000 bill, albeit that it a potential bill at this point—hanging over the residents that is so unsettling for them. I commend Barratt for stepping into the breach and covering the remediation costs at Citiscape in Croydon. I am sure the Housing Minister will be making a point about the good behaviour of Barratt when he speaks to the agent of the Heysmoor Heights freeholder shortly.

Where building owners are seeking to pass on remediation costs to leaseholders, it is important that leaseholders can access specialist legal advice and understand their rights under leases, which are often long and complicated documents. It is absolutely correct that the Government have worked with the Leasehold Advisory Service—LEASE—to provide additional funding for independent, free, initial advice so that leaseholders are not only aware of their rights under the lease but are supported to understand the terms of these often complicated legal documents. LEASE continues to provide valuable support to affected leaseholders around the country. If the leaseholders at Heysmoor Heights have not done so already, I would encourage them to get in touch with the Leasehold Advisory Service to get some initial advice about their potential liability. The Secretary of State will also be holding a roundtable on the barriers to the remediation of buildings that have unsafe aluminium composite material cladding.

We are keeping the situation under review. I will specifically draw tonight’s debate to the attention of the Housing Minister. I will ask him to keep the residents of Heysmoor Heights informed, and to keep under review the progress not just of the insurance claim but of the wider question about where liability lies. We want to ensure that costs are not passed on to leaseholders, because they should not be. The hon. Lady quoted the Housing Minister, who said that there is a moral obligation not to pass those costs on to leaseholders. I absolutely agree with both him and the hon. Lady in that regard.

I hope that the points I have made this evening have reassured hon. Members just how seriously the Government are treating the issue of building safety. We will continue to make the case to building owners that we absolutely do not expect these costs to be passed on to the leaseholders of Heysmoor Heights or anywhere else. We will continue to provide support through LEASE to leaseholders who are faced with these unexpected bills, and we will continue to take all necessary steps to ensure that residents feel safe and secure in their homes. We will keep the situation under review. It is important to say that we have not ruled out any options at this stage.

As a proud son of Liverpool, I will finish by directly quoting the hon. Lady: what is good enough for Croydon is good enough for Liverpool and the residents of Heysmoor Heights.

Question put and agreed to.