CIC has submitted evidence to the Levelling Up, Housing and Communities Committee inquiry that is scrutinising the government’s plans for fixing the building safety crisis.
The evidence highlighted that the proposal to retrospectively extend the limitation period under section 1 of the Defective Premises Act (DPA) to 30 years, announced by ‘levelling up’ secretary Michael Gove on 10th January, could have ‘dramatic’ consequences across the industry. Currently, the limitation period is six years from the completion of the dwelling. A clause in the Building Safety Bill proposed the retroactive extension of the limitation period under the DPA to 15 years and this is now intended to be doubled.
CIC said that such an increase in level and extent of liability risked shutting SMEs out of housing development and the wider building market, and force competent people to be excluded from providing services due to risk aversion within the insurance sector. The insurance sector itself could undertake its own analysis of the risks and potential costs and walk away from construction, it warned.
CIC also warns that the government will be forced to intervene in the insurance market.
“It will be necessary for state intervention to ensure the provision of PII to suitably competent and experienced engineers and others taking on liability for fire safety relating to the necessary remedial works being undertaken via the building safety fund if commercial market insurer continue to insist on excluding cover for fire safety,” the CIC says in its submission.
Furthermore, documents stretching back as far as 30 years may well have been destroyed by now on account of them being considered no longer relevant to liability issues, under current rules.
The secretary of state has more recently announced a raft of further amendments that CIC members believe will further add to the insurance pressures across the sector and could have a harmful impact on the capability to remediate unsafe buildings and build new housing.
CIC’s response agreed with the principles set out by the secretary of state that leaseholders should not have to pay to remediate buildings that are unsafe and that those responsible for profiteering at the expense of fire safety should be removed from government schemes that provide them with work or that provide grants, subsidies or loans to their customers.
CIC chief executive Graham Watts said: “We desperately need to remediate hundreds of buildings across the country and increase the rate of building new homes. Yet these proposals could put this work at risk by making it impossible for companies and people to continue in the sector.
“It is vital these very late amendments must be given greater scrutiny to allow for the passage of a bill that provides great recompense for consumers but ensures the viability of the construction sector and its ability to help deliver on the levelling up agenda.”
The Construction Industry Council represents most of the construction industry professional institutions, including all the big ones (RIBA, RICS, CIBSE, CIOB etc,) but notbaly not the Institution of Civil Engineers, which quit the CIC in December 2019 “to support things that map closer to our mission statement”, it told us six months later.