Written evidence submitted by G15 [BSB 071]

 

Detailed points on draft Building Safety Bill

 

This is a response on behalf of the G15 largest London housing associations. The G15 own approximately ten per cent of the high-rise buildings in England, representing thousands of families and leaseholders who will be positively and negatively impacted by the upcoming changes to legislation. More information about the G15 is available on our website.

 

We have previously documented our activity on remediation works and the scale of the challenge still to be delivered. We have also clearly set out the anticipated costs and funding gap, as well as highlighting the severe impact on leaseholders and current sales and mortgage market.

 

As charitable housing associations with regulated income and limited resources our response to changes to managing buildings needs to be seen alongside competing aims to build new affordable homes, deliver the services that residents expect and meet other investment requirements in our homes – most notably the challenge of achieving net zero carbon (on which there is a need to align physical works with building safety remediation).

 

Work on bringing about the cultural, structural and operational changes required to comply with the new legislation has already begun in anticipation in many of the G15 organisations, and while we recognise the need for these changes, the work to transform our data monitoring and performance management systems from asset base modelling to a building-centric approach should not be underestimated.  In addition, we will need time to extensively redesign our operating models with associated adjustments to procedures and structures in order to provide the prescribed local service responsiveness and accountability required of the Act.

 

We estimate the timescale for implementation of the requirements of the Building Safety Bill could take up to three years, dependent upon the size of portfolio; this is not to be confused with activity to deliver the commitments from the new Fire Safety Bill.  In previous consultations we have indicated that, despite continued attention, remediation for tall buildings could take up to ten years.

 

As well as this submission the G15 would like to request the opportunity for our Chair – Helen Evans (CEO of Network Homes) to give oral evidence to the committee as part of your pre-legislative scrutiny of the Bill.

 

To allow all providers to deliver the scope and scale of these changes the Government needs to explain its intent and ambition for the timing of the Bills to be enacted and the expectation for full adoption and enforcement.

 

While the Act defines ‘higher risk’ buildings as over 18m or six storeys, there is an obligation on managing risk proportionately in other types of buildings below this threshold.  This will significantly increase the number of affected properties. In order to bridge the funding gap that many registered providers face there is a need for the Government to broaden the funding criteria to cover cladding and general building safety remediation works to all buildings where a significant risk has been identified

 

To accelerate training and development, greater visibility of the competencies required for Accountable Person (if it is an individual) and Building Safety Managers is essential. Without this it will be difficult for building owners to ensure their employees are trained, competent and adequately supported.

 

Clarity is needed on the indicative timescale for full establishment of the new roles and structures required. This extends to timescale for the establishment of the salient statutory bodies including the New Homes Ombudsman, Competence Committees for industry and a Building regulations advisory committee.

 

There are several areas within the draft Bill that specify that the detail and information required will be prescribed through forthcoming regulations. This is particularly relevant to the requirements for the building safety case and historic records, in particular:

Will the Bill provide for a robust – and realistic – system of accountability for those responsible for building safety?  Are the sanctions on those who do not meet their responsibilities strong enough?

Whilst the aim of making residents safe should be shared by all, the elimination of all risk is not possible and therefore all additional burdens need to be carefully scrutinised to ensure they provide the optimal level of protection for the associated cost. 

 

We question the logic and the effectiveness of six-monthly tests on the closeres of internal fire doors. Whilst maintaining fire door closures is an important safety measure this requirement will not necessarily make people any safer (resident behaviour could lead to closures being disconnected immediately after the visit) and add significant expense and administration. We believe that a requirement to educate residents on the importance of fire doors, explain why closers should not be disconnected and explain to residents how to test effectiveness would result in greater safety and less cost, noting that these are ultimately passed onto residents. If this requirement is retained then if it was reduced to annual frequency then it could be aligned to gas servicing for tenanted homes. For leasehold homes there would be an entirely new process as there would be for rented homes if retained at six months – for both situations there would need to be new rights of access in order for building owners to ensure access.

 

At present there is considerable uncertainty in relation to the scope (in particular the number of buildings that an individual Building Safety Manager could look after) and responsibilities of a Building Safety Manager.

 

This is unclear. As housing associations we already are committed to hearing the voice of our residents and implementing service improvements as a result. We already have regulatory requirements that we must meet in relation to resident involvement and empowerment. A number of G15 landlords have already consulted with residents on our strategies for engaging residents in building safety.

This was an unexpected part of the Bill and the intention behind splitting building safety charges from other service charges is not yet clear. If the aim is to develop a different mechanism to pay for these charges then it is to be welcomed. But there is an urgent need for this to be developed sooner to resolve current significant issues leaseholders are facing in buildings from valuation and lending processes.

We strong agree with the Cladding Progress and remediation report by the Committee supports a call for an acceleration to the resolution of the mortgage provision in the sector and proposes further and strong provisions for funding in particular:

 

All providers are encountering difficulties with the current mortgage market requirements and EWS1 forms, and there are a mounting number of leaseholders who are effectively trapped in properties they are unable to sell. The Government has expressed a statement of intent about protecting leaseholders from historic costs but there are specific sections of the draft Bill which conflict with this and need urgent clarification.

 

We believe that government needs to indemnify leaseholders from costs over a certain threshold to make the potential costs finite and manageable. This could then lead to the development of an insurance product to cover the remainder of the risk on buildings where the costs of building safety works are yet to be quantified. This could be similar to the proposals contained within the Dilnot Review on Social Care. The G15 are keen to develop this proposal in more detail and work with any stakeholders who are interested.

 

The Impact Assessment notes that leaseholders could expect to pay for multiple measures in 30m+ buildings of up to £78,000. This assessment also details expected central costs of £9,000 (ranging from £8,000- £17,000 per leaseholder in an 18m+ building.

 

The current proposal that Building Safety Charges must be presented within 28 days of the year end is not achievable. For service charges there is a period of six months from year-end to produce final accounts and this will be a similar process which should be aligned in timescale.

 

Leaseholder costs could also be significantly impacted by the cost of insurance. There is a need to engage with insurance providers to understand their view of changing risk and premiums during the implementation of this legislation.

 

There are references in the Bill for the approval of insurance schemes and the requirement for providers to have insurance schemes in place for high rise buildings that can cover losses associated with building safety risks.

The insurance industry needs to advise building owners on changes they will need to consider to meet their requirements. This is particularly relevant to insuring their staff in these new roles or if a new model of professional indemnity will be needed.

 

Nothing to add.

 

The establishment of a new Regulator has the potential to confuse the regulatory regime for housing associations given the fact that there are several regulatory and enforcing bodies that govern their operations including the Regulator of Social Housing (RSH), the Fire Service and Local authorities. In particular attention is needed in the following areas:

 

It could present an opportunity but this would need to be considered with the principle of retrospectivity and in the knowledge that doing so would add additional cost to leaseholders. We have reviewed fire safety measures in our buildings and already carried out retrofit activity to add sprinklers where we believed it appropriate to do so – going above and beyond current legislative requirements.

 

 

September 2020