The Grenfell Tower Inquiry phase two report, released last week, stretches to 1,700 pages across seven volumes. Despite its length, nobody could accuse it of being bloated. In fact, it is remarkably concise, given the 299,647 documents and dozens of hours of testimony the inquiry panel had to condense. The inquiry panel’s narrative account of the events leading to the tragic events of 14 June 2017 is a pin-sharp and searing indictment of government, regulators, the client, construction firms and emergency services. Not a single word is wasted in laying out the sorry tale of of deceit and incompetence.
Apart from the manufacturers named in the report, whose product sales rely partly on their reputation, few within the construction industry have publicly commented on the report. Many say they are giving themselves time to absorb the comments. However, Construction News has discovered another reason behind the silence. Many within the industry hold reservations about some of the recommendations made at the end of the report but are wary about putting their head above the parapet publicly.
Following the release of the report, CN has spoken off-the-record to a number of senior sector figures. Many say that they believe the panel recommendations give inadequate consideration to the major changes introduced by the Building Safety Act (BSA), let alone the banning of combustible materials on higher-risk buildings (HRBs) and new rules on second staircases. One senior construction lawyer said: “Although the recommendation section acknowledges the existence of the Building Safety Act, it doesn’t engage with any of the detail of the law that’s been introduced.
“We’ve had massive changes to the way we procure construction work, particularly for higher-risk buildings, we’ve got a myriad of different regulations we have to comply with. We’ve got the new competency requirements, the new duty holder requirements. We are now in a world that is substantially different to the one that existed in 2017.”
Another senior sector figure with experience of working with government says the description of the events is “a very forensic, very neat summary of what happened”, and agrees with the aim of driving out bad practice in the construction industry. “Why would you quarrel with that objective?” they ask. “You wouldn’t, obviously. Everybody’s objective should be we now want safe products incorporated to buildings built safely.”
But this figure warns that not all of the panel’s proposals for industry reform flow logically from the detailed description of how a single contractor was able to install products from three manufacturers in a disastrously unsafe manner. “How you get from the report’s narrative and that safety objective into some of these recommendations I really struggle with,” they said.
In coming months, the government has the unenviable job of grappling with the recommendations and turning them into a plan of action that will reduce the further risk of another disaster in an HRB. We leave it to the reader to decide whether the concerns raised below contain any validity or are further signs of foot-dragging by an industry resistant to reform.
Super-regulator
The inquiry’s proposal to create a super-regulator for the sector would gather under one roof a raft of responsibilities currently carried out by separate bodies: responsibility of product regulation, testing and certification, regulation of building control, licensing of contractors, research on fire safety and fire risk assessor accreditation. These would come on top of the existing remit of the Building Safety Regulator (BSR), which considers applications for higher risk buildings.
Comments on this proposal from those CN spoke to range from “ambitious” to “unrealistic”. The senior construction lawyer said: “It seems to me to be an entirely impractical beast. I mean, you can’t have a single regulator being in control of absolutely everything. You would have to a sort of a construction equivalent of the NHS.”
Many say that the teething problems being experienced by the BSR raise serious questions over whether creating a significantly bigger regulator is even achievable. One senior figure at a tier one contractor said: “The government has struggled to properly fund the BSR as it currently exists. Where do you pull the funding for when we’ve already shown that trying to do it even on a smaller scale it’s really hard? It’s quite ambitious”.
Others question whether the move is even necessary. An existing recommendation for improvements to the current system of product testing has been sitting on a Whitehall desk gathering dust for more than a year. The review by former government chief construction adviser Paul Morrell and Anneliese Day suggested beefing up the powers of the United Kingdom Accreditation Service in response to the failings highlighted by Grenfell. A senior figure at one trade body said that full nationalisation of its work via a new regulator could be “overengineering the solution”.
The idea that transferring responsibilities to the public sector will automatically result in improvements in governance of the system is also under scrutiny. “The government was leading all of this, and it was a shit show,” said one senior executive at a trade body. “The inquiry report very clearly said that the regulation wasn’t right, the enforcement wasn’t right, the regulation wasn’t right. There was political influence over the independent civil service.”
Another well-known name in the industry agrees. “If you say that companies are evil and government should do it, you are putting the entire burden onto a government that is very thinly resourced, and which itself has been criticised in the review for being badly run and dysfunctional. So why would you do that?”
The commentator said the idea that radical changes in government machinery are a solution to the problems raised by the report are ill-considered. “Such changes always get recommended in big reviews. If you’re centralised, you must devolve. If you’re devolved, you must centralise. But there will always interfaces where things may fall down the gap. So the idea that suddenly we can have everything in one department reporting to a single secretary of state is, I think, actually naive.”
Licensing of contractors carrying out HRB work
Some commentators were less critical of the idea of requiring licenses for contractors working on HRBs. The lawyer said: “I can see that licensing would be beneficial to our clients in the sense that if a contractor receives some sort of national license, it acts as a kind of a guarantee of that contractors competence, and therefore you may not necessarily have to go through the arm wrestle [of proving competence] on each job.”
Tier one contractors would be “quite relaxed” about licensing, said the figure at the major contractor. “We have got the scale and the capacity. It’s a benefit for us as it makes it harder for others to do what we do. From a competition point of view it makes the services we provide more valuable.”
However, the flip-side implication is that the licensing requirement could put pressure on smaller contractors and those in the supply chain. “If you have got a 100-person facade contractor getting licensed, well that’s really difficult for them,” the large contractor executive said. “The tier ones will shrug off a licensing requirement and be fine with it. It’s everybody else that will have the problem with it.”
Change to definition of HRB
The phase 2 report argued that the current definition of HRBs, based on height, is too rigid and should be reviewed to draw in more buildings housing vulnerable people. However, a number of commentators believe this move could lead to a number of unintended negative consequences. One commentator with experience of central government said: “Having worked on these things I have seen how academics can turn these things into an academic exercise and the system gets paralysed.”
The tier one contractor agrees, saying that the potential of lots more schemes within the HRB definition could cause housebuilders to hold back schemes. “If you are doing lots of residential work, you’d struggle to tell a client with a straight face that their programme definitely won’t get disrupted by a massive change like this. The message that everyone’s giving to government is that we need clarity on pipeline. This kind of thing is exactly the sort of thing that leaves everyone going ‘we’ve got no idea what’s going to happen. So, actually, maybe don’t invest and maybe don’t trigger your project.’”
However, they say that the larger firms could cope with the requirement “if [government] did it in a sensible way with plenty of telegraphed notice and made it clear it wasn’t going to act retrospectively. For big contractors on the very big schemes, it probably won’t be that disruptive, but there’s a whole set of HRB stuff done by medium-sized firms that will struggle.”
Others question how easy it will be to run a system with thousands of new buildings defined as HRBs at the same time as requiring licenses for all contractors working on them. The construction lawyer said: “If you extend the ambit of HRBs, you are extending, by definition, the cost and the resources needed to build and manage them. And I just don’t think the construction industry in the UK has remotely enough capacity to do that.”
Declarations of care
The inquiry’s phase two report calls for a requirement that applications for HRBs should be accompanied by a declaration by a director or a senior manager of the principal contractor to “take all reasonable care to ensure that on completion and handover the building is as safe as is required by the Building Regulations”.
The lawyer argues that this would usher in a “world of pain” that is unnecessary, due to existing requirements introduced by the BSA. “At the moment a gateway two application requires you to do a hell of a lot. It just seems to me to be completely unnecessary, over the top, to have people making statutory declarations about things.”
He also said thought needs to be put into the financial consequences of the proposal, claiming that the insurance industry will be reluctant to provide personal liability insurance for directors which face potential criminal prosecution. “I just don’t think the insurance market is going to support us,” they say.
Missed opportunities
A number of commentators voiced disappointment that the phase two reports had not touched some areas that they see as potential solutions to avoiding another tragedy similar to Grenfell. These relate to the current structure of contracting itself. Although raised by some witnesses in the hearings, the inquiry panel made no comment on these issues.
The tier one contractor said that some of problems in the system relate to the fundamentals of procurement and contracting: “Unless you assume that people are fundamentally bad, why is it a sector rife with this kind of behaviour? Actually the problem is that the risk delegation in construction is all over the place. Nobody makes any money, and actually maybe design and build contracting, and one-step contracts are the problem. If the sector had a better, more equitable model that allowed contractors to generate balance sheets and not run on incredibly thin margins and fall over once every 10 years,”
The trade body leader believes the inquiry could have made more of the inadequacy of current contractual relationships, which led to a lack of clarity about responsibilities. “There is an issue with one set of lawyers taking a standard set of contracts and rewriting it in a way that’s really inaccessible, and then dumping off the supply chain and people who aren’t competent. The supply chain is either paying lawyers, or in this case not paying lawyers, to interpret the information, We’ve already got a set of standard contracts. Why aren’t we driving people to use standardized contracts and not stick schedule amendments on the end of it, which confuses everybody? That’s an easy win.”
So where next?
The commentators we spoke to are not implacably opposed to further reform to improve contracting. There is unanimous support for proposals to put fire engineers on a statutory footing and for strengthening oversight of product testing and certification. Their concerns mainly relate to practicality and the potential for introducing burdens in areas already covered by new procedures brought in by the Building Safety Act.
It is likely that the Construction Leadership Council will begin to work up proposals trying to bridge any gaps between the Building Safety Act and the Grenfell Inquiry recommendations. Officials in the Ministry of Communities and Local Government are understood to already be talking to industry about how to formulate its response.
The figure with experience of government said: “You’ve got to give [civil servants] time to absorb and respond and look at it, and then let some of the blood go from the head and go back to look at each recommendation, and see what can be done. There’s a kernel of truth in each recommendation. It’s about turning them into something sensible.”
