Cladding applications ‘stuck at final hurdle’ due to fine print

Residents in Birmingham who live in high-rise buildings above 18 metres are applying to the Government’s Building Safety Fund for money to cover the cost of making their buildings safe.

Widespread safety failings have been uncovered in buildings across the country in the wake of the Grenfell disaster in 2017 in which 72 people lost their lives.

But the Building Safety Fund carries a requirement for all companies involved in the proposed remediation works to carry professional indemnity (PI) insurance to the value of the entire works.

This is proving very difficult to orchestrate, according to residents in the city.

Scott Mason, 32, a chartered engineer and a director of a residents’ management company at a high-rise building in the city, said: “I know ultimately it has got to get resolved but I don’t think we are talking about weeks.

“We have been working on our application for coming up to a year now. We have got a cost estimate of about £11.5 million [for total remediation works].

“But within the requirements of the Building Safety Fund are that all companies involved in the project must have professional indemnity insurance to the value of the whole works.

“In our project we have got four different companies involved. A fire engineering company, façade designers, a surveying company and eventually the contractors.”

He said the fire engineers’ work comes to around £50,000 but they would need PI equal to £11.5 million.

He said: “It’s ludicrous. I work in this industry and it’s very unusual to expect a designer or consultant with small fees relative to the total cost of the job to carry PI to the value of the construction costs itself. The most they can be insured is £1 million – but they are supposed to have £11.5 million.

“I am pretty confident we are going to get the money but we can’t tick the box and say our team has the levels of PI insurance required.”

He said the longer the remediation is delayed, the longer residents will have to keep paying interim costs such as rocketing insurance and Waking Watches – 24 hour patrols of the building to check for fires.

Paula Shalloo, who does academic proofreading, is a member of the steering committee for Birmingham Leaseholder Action Group ‘BrumLAG’, and lives at a high rise complex in Birmingham, agreed.

She said: “It’s like a Catch-22 situation. It is something that has been raised as a query with the Ministry of Housing, Communities and Local Government (MHCLG) and all we have been told is that MHCLG is working on a solution. Applications are stuck at the final hurdle.”

An MHCLG spokesperson said the Government is aware of the situation and is working with applicants to resolve issues around PI.

They said: “We are spending £5 billion to fully fund the replacement of all unsafe cladding systems in the highest risk buildings and are making the biggest improvements to building safety in a generation.

“So far we’ve processed applications for more than 600 buildings, with estimated remediation costs of £2.5 billion.”

The spokesperson said the department is “aware that the professional indemnity insurance market for contractors and consultants carrying out fire safety works has hardened over the past 12 months”.

But they said the department would “continue working with applicants to resolve issues with professional indemnity insurance”.