The Week That Was – 24 May 2024

Welcome to the week that was, a round-up of key events in the construction sector over the last seven days.

Introduction

On 22 May 2024, the UK Prime Minister, Rishi Sunak, announced that a General Election will be held on 4 July 2024. As campaigning gets underway over the next 6 weeks, leading up to polling day, we will bring you updates on the manifesto promises and policy pledges made by the various parties relevant to construction..

Building Safety Act 2022: First-tier tribunal makes remediation order 

In The Department for Levelling Up, Housing and Communities v Grey GR, a remediation order (RO) has been granted by the First-tier Tribunal (FTT) pursuant to section 123 of the Building Safety Act 2022, requiring the freeholder, Grey GR, to address safety issues at Vista Tower in Stevenage.  This is the first legal action brought by the Government under these powers. 

Grey GR, owned by Railpen, a multibillion pound railway pension fund, acquired the freehold of Vista Tower in 2018, and building safety issues were identified in 2019.  The Government and Grey GR had agreed a specification of relevant defects and remedial works. Legal action was launched by the Government against Grey GR in October 2022 following what it stated were unacceptable delays to the remedial works. Grey GR's position was that, as this was the first case where both a building contract for the remediation works and a grant funding agreement were in place, a RO was neither necessary nor desirable. 

The FTT acknowledged that Grey GR had begun remedial work, with practical completion scheduled for September 2025.  However, it decided to grant a RO to reassure leaseholders as the RO will provide an exact date by which the work must be completed failing which Grey GR could face a sanction.

In this first instance of the FTT granting an RO, it has made it clear that it will look to assist the leasehold owners of flats in buildings which suffer from safety defects to ensure buildings are remediated quickly and efficiently.

To read the judgment, please click here.
 
Government biodiversity uplift scheme faces criticism

The National Audit Office (NAO) has criticised a scheme introduced by the Department for Environment, Food and Rural Affairs (DEFRA), requiring building developers to achieve a 10% uplift in biodiversity on sites.

Under the terms of the scheme, developers can purchase biodiversity units if they are unable to meet their targets on site.

The NAO warns that the scheme was launched prematurely before proper support could be developed for local authorities who are expected to monitor the scheme without input from DEFRA.  There is also no mechanism in place for spending the income from biodiversity credits. 

There is concern in the industry that an overly complex and ill-thought out scheme could impact negatively on smaller developers.

Click here to read more.

UK Green Building Council (UKGBC) calls for increased retrofit budget

The UKGBC has suggested that the next Government needs to spend £64bn on upgrading the country's housing stock over the next decade to reduce carbon emissions and minimise costs on future grid upgrades. 

The group claims that, if the proposed funding is spent on retrofitting cold and damp homes, this would save £60 billion on grid upgrade costs, as well as reducing the energy expenditure for those homes and reducing the country's overall carbon emissions. 

In addition, the UKGBC has also proposed amending the stamp duty system to introduce an 'Energy Saving Stamp Duty' to incentivise homeowners to make sustainable upgrades to their homes, which would, in theory, drive a sustainable mass-scale market for measures such as insulation, heat pumps and solar panels. 

Click here to read more.  
 
Old Museum of London site to be demolished

Controversial plans to demolish the Museum of London will be approved.  Michael Gove, the Secretary of State for Levelling Up, Housing and Communities, had issued a holding directive against the plans which he has now removed.  Whilst the Barbican Centre is Grade II listed, there is an exemption for the former Museum and Bastion House which means they can both be demolished.

The plans include 2 high-rise office buildings on the site adjacent to the Barbican.

The scheme has been met with opposition by both the local community and MPs due to its environmental and heritage impact.  Plans had originally been submitted to retrofit the Museum but these were not explored in any detail.

The replacement and renamed London Museum is due to open at Smithfield in early 2026, whilst the demolition works are expected to begin in 2028, with the new development to be completed in late 2033.

Click here to read more.
 
Government's New Hospital Programme (NHP) hit by funding delays  

NHS Trusts' confidence in the Government's £20bn new hospitals pledge is said to be on "increasingly shaky ground" due to funding delays, with trust leaders concerned schemes in the NHP will either be scaled back or delayed beyond the current 2030 deadline. 

NHP leaders within the Government are taking more than a year to approve the national business case for the programme, leaving NHS trusts with no clarity as to where funding will be allocated from 2025 and 2026 onwards, limiting those trusts' ability to engage with potential partners or to progress builds.  Such delays are then being compounded by planning delays, which in turn will increase costs of the projects due to ongoing inflation concerns. 

In addition to uncertainties regarding funding for the programme moving forward, schemes in development are also suffering setbacks, with two schemes (Whipps Cross University Hospital and Princess Alexandra Hospital) unlikely to be completed before the Government's 2030 deadline. 

With a General Election to be held in 6 weeks' time, the scheme's viability may be called into further question.

For more information, please see here.

Housing (Cladding Remediation) (Scotland) Bill passes

On 14 May 2024, the Scottish Parliament unanimously approved the Housing (Cladding Remediation) (Scotland) Bill which has been introduced to reduce the risk to life from unsafe cladding on people’s homes.

A key change introduced is the creation and maintenance of a publicly accessible cladding assurance register which contains records on whether or not a particular building requires work to reduce or eliminate risks associated with its cladding system.  Ministers will have powers to arrange for the assessment and remediation of certain types of buildings with unsafe cladding.  Ministers will also be able give notice to building owners of an intention to carry out works (either 7 or 21 days) and arrange for the work to be completed with building owners only having a 21-day period to appeal.  Finally, the bill will establish a responsible developers scheme whereby if a developer refuses to join the scheme, it may face sanctions (including being barred from completing any development work in Scotland). 

The Scottish Government's housing minister, Paul McLennan, said the new legislation was a "landmark moment". 

To find out more, click here.
 
Disclaimer: The information in this publication is for guidance purposes only and does not constitute legal advice.  We attempt to ensure that the content is current as at the date of publication, but we do not guarantee that it remains up to date.  You should seek legal or other professional advice before acting or relying on any of the content.

Authors for this week's edition: Georgina Haynes, Harry Langford-Collins and Laura Sponti