Written evidence submitted by Dr Mustafa Selçuk Çıdık and Dr Steve Phillips [BRF 064]
The following submission represents the views of Dr. Selçuk Çıdık and Dr. Steven Phillips, who are academic experts in the organisation of the construction industry, and building surveying and engineering, respectively. Our arguments build upon our joint research on the organisational culture of building life cycle and how this determines safety-related behaviour. This research explored the opinions and experiences of built environment professionals in England about the ongoing regulatory changes regarding high-risk buildings following the Grenfell fire (Çıdık & Phillips 2021). The views presented in this submission are also informed by Dr. Phillips’ extensive experience as a practicing building surveyor and his publications about post-Grenfell regulatory interventions (Phillips 2021; Phillips & Martin 2021). We believe that we are well placed to respond to this inquiry with our combined academic and practical experience in the construction industry, and our research interest on building safety in post-Grenfell England.
C. What is your assessment of the Government’s announcements on 10 January 2022 regarding building safety?
C.1. The points highlighted in the announcements suggest the Government’s awareness that the problem is complex. However, the announcements do not clearly iterate the key dimensions of the problem and how they relate to each other. Establishing these challenges, as outlined below, would make the comprehension and the resolution of the crisis easier:
C.1.1. how to establish an understanding of ‘fire safety’ that only leads to essential remedial work and temporary measures that are proportionate to the level of risk;
C.1.2. how to encourage the key decision-makers (particularly the lenders, fire risk assessors, insurers, fire and rescue services, and landlords) to buy into such a proportionate understanding of fire safety avoiding excessive risk aversion;
C.1.3. how to fund the essential remedial works and temporary measures as quickly as possible and without making the leaseholders pay.
C.2. The Government’s proposed solutions are unlikely to fully address these three intertwined dimensions of the crisis and may even exacerbate the crisis, as we elaborate in D.1. and D.2.
C.3. It is unlikely that the industry will ‘do the right thing’ through engaging via constructive dialogue (i.e., roundtables) and descriptive guidance (i.e., PAS 9980). This is because safety-related behaviour in building life cycle is driven by the following problematic cultural traits (Çıdık & Phillips 2021):
C.3.1. Distant and formal communication focusing on document handover instead of meaningful engagement;
C.3.2. A focus on surface compliance where the demonstration of compliance is prioritised against a deeper engagement with the purpose of the regulations and processes;
C.3.3. An inward-looking understanding of risk trying to minimize one’s own legal, reputational, and financial risks.
D. Do the announcements go far enough, and what, if anything, is missing?
D.1. The incentives for excessive risk aversion and spiralling fire safety costs remain. A major issue is that key decision-makers benefit from excessive fire risk aversion at the cost of the leaseholders, and the announcements, as they currently stand, are unlikely to have a tangible effect on this issue. This has several components:
D.1.1. There is no change to the principle that all buildings (even if they are not high rise) should be assessed in a detailed manner for all fire risks.
D.1.2. From a legal perspective, those who make decisions about fire safety are still not the ones who pay for it. For this reason, those decision-makers who have a legal, reputational, or financial stake (i.e., lenders, landlords, insurers, fire safety assessors, and fire and rescue services) will continue to opt for excessive risk aversion, which they will see as the safest option considering their legal, reputational, and financial exposure.
D.1.3. The announcements do not address the fact that several key decision-makers financially benefit from excessive risk aversion. For example, excessive fire risk aversion increases the demand for those providing fire risk assessments and waking watch, and in some cases, even sees the same company providing both services. Similarly, managing landlords can charge higher management costs which are calculated as a percentage of the total service charge. Furthermore, the insurers can charge increased premiums for the buildings with ‘risk’.
D.1.4. Recommendation 1: Ensure through legislation that all costs due to extra fire risk investigations and assessments (for example anything in addition to one Type 1 Fire Risk Assessment per year) as well as the costs of any remedial works and temporary measures cannot be charged to leaseholders. Landlords who are involved in decision-making about fire risk assessment, remedial works and temporary measures must be the only ones responsible for these costs (see also D.1.5. Recommendation 2). Landlords would then have an incentive to avoid excessive risk aversion and to negotiate the most reasonable ways forward with service providers such as insurance companies, fire risk assessors etc.
D.1.5. Recommendation 2: Ensure through legislation that landlords can recover the costs of additional fire risk assessments (if/when absolutely necessary), essential remedial works, and essential temporary measures from the Government funds (collected from the industry) and/or developers, where these were due to inadequate workmanship and materials (potentially through the updated Defective Premises Act – Ministry of Housing, Communities & Local Government 2021).
D.1.6. Recommendation 3: The Government should establish a cap on building insurance premiums and the annual increases to them. In case insurers reject the Government’s caps, the Government should establish a transitionary arrangement to provide insurance to the buildings that are suffering from high building insurance premiums.
D.2. The subjective and complex basis of fire safety assessment remains the same, which will continue to fuel excessive risk aversion and rapidly increasing fire safety costs.
D.2.1. The newly introduced PAS 9980 is a descriptive and complex guidance, which is open to highly varying interpretations of what is acceptable risk (Evans 2021).
D.2.2. Combined with the legal, reputational, and financial incentives for excessive risk aversion explained in D.1., it is expected that such a guidance will not be able to enable a proportionate approach to fire safety as hoped by the Government.
D.2.3. The outcomes resulting from the introduction of PAS 9980 will likely to be similar to the EWS1 process, which unintentionally created additional problems (Phillips 2021). This is because both PAS 9980 and EWS1 rely on the interpretation of a descriptive guidance by distributed assessors within a context where excessive risk aversion has legal, reputational, and financial incentives.
D.2.4. Situations have already started to be reported where PAS 9980 led to the recommendation of expensive remedial works for low-rise buildings under 18 metres (Apps 2021), which is counter to its original intention of bringing a more proportionate approach to fire safety.
D.2.5. Recommendation: The Government should introduce a more prescriptive, simple, and centralised way of assessing fire safety based on the level of risk for the existing residential blocks. As suggested by Evans (2021), this could ask for the information on the building type, external wall, and few other key factors to be put into a grading system, which returns a risk score; and this determines whether the building’s cladding or external walls need to be remediated. Necessary legal and technical arrangements should be made to ensure that fire risk assessors, lenders, insurers, fire and rescue services, and landlords buy into this system and make their decisions based on the outcome of this grading system.
Apps, P. (2021) Draft government guidance resulted in decision to remediate below-18m block. [Online]. Retrieved from: https://www.insidehousing.co.uk/news/news/draft-government-guidance-resulted-in-decision-to-remediate-below-18m-block-73485. Accessed on: 10 February 2022.
Çıdık, M. S. and Phillips, S. (2021). Buildings as complex systems: the impact of organisational culture on building safety. Construction Management and Economics, 39 (12), 972-987. Available online: https://doi.org/10.1080/01446193.2021.1966816.
Evans, J. (2021). PAS9980 – when you thought things couldn’t get any worse. [Online]. Retrieved from: https://www.linkedin.com/pulse/pas9980-when-you-thought-things-couldnt-get-any-worse-evans-fimeche/. Accessed on: 10 February 2022.
Ministry of Housing, Communities & Local Government (2021). Building Safety Bill: factsheets - redress: factsheet. [Online]. Retrieved from: https://www.gov.uk/government/publications/building-safety-bill-factsheets/redress-factsheet. Accessed on: 10 February 2022.
Phillips, S. (2021). The valuation of high-risk buildings and the role of EWS1. Journal of Building Survey, Appraisal & Valuation, 9 (4), 305–314. Available online: https://www.henrystewartpublications.com/jbsav/ValuationofhighriskresidentialbuildingsandtheroleofEWS1.
Phillips, S., and Martin, J. (2021). Grenfell and construction industry reform. UK: Routledge.