Grenfell Inquiry phase 2 report: how it could affect the construction industry

• 1 October 2024
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The Grenfell Tower Inquiry’s final report was published on 4 September 2024. Amongst its findings regarding the causes of the fire, which make sobering reading, the report made clear that it feels more can and should be done to bring a change of attitude to the construction industry.

The report contains various recommendations for change. The scale of the overall impact is not currently clear, as it remains to be seen whether and how they will be implemented, however one of the recommendations does encourage their implementation by suggesting that reasons for not executing any particular recommendation should be explained clearly in writing, and made publicly available. The government’s response to the recommendations should bring some clarity on this, and will be awaited eagerly. In the meantime, we summarise some of the report’s key recommendations below (the full list of recommendations is to be found in Chapter 13 of the Report):

Fire safety responsibility within government

The Inquiry was critical of the fragmented approach to fire safety issues within both government and the construction industry. It recommends that the following appointments be made, with a view to consolidating the various responsibilities, driving change and enabling effective information sharing between those responsible for different aspects of the industry.

• A single Secretary of State with responsibility for fire safety functions.

• A Chief Construction Adviser, with good working knowledge and practical experience of the construction industry, to provide advice on all matters affecting the construction industry.

• A new Construction Regulator overseeing a single independent body, reporting to the Secretary of State. They should be responsible for the regulation, testing and certification of construction products, the regulation of building control, licencing contractors to work on HRBs, and other associated tasks.

A review of the definition of “Higher-Risk Building”

Of particular note is the Inquiry’s recommendation that the government urgently reviews what is considered to be a higher-risk building.

The concept of a “higher-risk building” (HRB) was introduced by the Building Safety Act 2022 (the Act). At the moment, a HRB is a building that is at least 18 metres in height (or has at least seven storeys) and contains a minimum of two residential units. Care homes and hospitals are considered to be HRBs during the design and construction phase, but not during the occupation phase and buildings that are used exclusively as hotels are not HRBs unless they are part of a mixed use building, in which case they might be considered an HRB.

Those buildings which meet the definition are subject to the onerous regulations contained in the Act, which govern the design, construction and occupation of those buildings. It is of paramount importance for a developer, and those working for them, to know whether or not any building will be a higher-risk building. In the Inquiry’s opinion, determining whether a building is an HRB by reference to its height is an arbitrary measure, and it preferred instead consideration of the nature and use of the building, and in particular the presence of any vulnerable occupants. The Inquiry recommended that what qualifies as an HRB under the BSA is reviewed urgently.

It is not clear how the government would go about formulating a new definition of HRB. The need for certainty will be key, but that will be difficult given that even the process of measuring the height of a building has given rise to disputes!

A review of the definition could have a significant impact on which buildings are subject to the enhanced regulatory regime under the Act, and significant consequences for the viability of developments which were previously understood to be outside of that regime. Also, it may mean that the number of buildings considered to HRBs is likely to increase, putting strain on a regulatory regime that is already struggling.

Regulation of professionals within the construction industry

The Inquiry makes the following recommendations as to how professionals working within the construction industry should be regulated:

• A licensing scheme operated by the construction regulator should be introduced for principal contractors wishing to undertake the construction or refurbishment of higher-risk buildings. A nominated director of such companies should provide a personal undertaking 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 Architects Registration Board and the Royal Institute of British Architects should review the steps they have taken since the Grenfell Tower fire to improve the education and training of architects, to check that they are in line with the Inquiry’s findings.

• The profession of fire engineers should be recognised and protected by law and an independent body be established to regulate the profession. A group of practitioners and academics should be convened to define the knowledge and skills to be expected of a competent fire engineer. An understanding of the principles of fire engineering should be encouraged in construction professionals and members of the fire and rescue services.

• The government should establish a system of mandatory accreditation to certify the competence of fire risk assessors by setting standards for qualification and continuing professional development and such other measures as may be considered necessary or desirable.

A review of building regulation guidance

The statutory guidance to the building regulations, particularly the guidance contained in Approved Document B (ADB), was found to be unsatisfactory. This has been the source of many problems, as it has been the tendency of many in the industry to treat ADB as a definitive statement of what the regulations require rather than as simply guidance, which is its intended purpose.

The Inquiry recommended that ADB is reviewed, and a revised version published as soon as possible. The revised version will make clear that it is guidance only, and that complying with it may not necessarily result in compliance with the regulations.

Whilst the Inquiry did not think it appropriate to recommend specific changes to ADB, it did make some comments which may have an impact on building owners’ current fire strategies. The Inquiry notes that ADB assumes “that effective compartmentation renders a stay put strategy an appropriate response to a fire in a flat in a high-rise residential building” but calls into question whether effective compartmentation can be assumed in the context of an existing building that has undergone some “overcladding”. This means that building owners of buildings that have been overclad may need to revisit their fire strategies, particularly if it is a stay put strategy.

Changes to the “Gateways” building control regime

The Inquiry makes a number of recommendations which would have an impact on the “gateways” building control regime for higher-risk buildings introduced by the Act.

It is recommended that the following additional documents are submitted with the building control application (Gateway 2):

• A fire safety strategy for the building produced by a registered fire engineer, which takes account of vulnerable people.

• A statement from a senior manager of the principal designer that all reasonable steps have been taken to ensure that, on completion, the building as designed will be as safe as is required by the building regulations.

• A personal undertaking from a director or 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.

It is also recommended that the fire safety strategy submitted at Gateway 2 should be reviewed and re-submitted at the stage of completion (Gateway 3).

Changes to those exercising building control functions

The Inquiry found that, at the time of the fire, many of those involved in major construction projects regarded building control primarily as a source of advice and assistance. It also found that approved inspectors had a commercial interest in acquiring and retaining customers that conflicted with the performance of their role as guardians of the public interest.

In light of these findings, the Inquiry recommended that the government appoints an independent panel to consider whether it is in the public interest for building control functions to be performed by those who have a commercial interest in the process, or whether building control functions should be performed by a national authority.

Second staircases mandatory in residential buildings over 18m from 30 September 2026

• 24 April 2024
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The Department for Levelling Up, Housing and Communities (DLUHC) has published its long-awaited guidance on second staircases in residential buildings in England. The update to Approved Document B brings certainty for developers navigating this area. Residential buildings over 18m will be required to have two staircases from 30 September 2026 save for those that at this date are “sufficiently progressed.”

Updates to Approved Document B

The updates to Approved Document B (the Government’s building guidance covering fire safety) were published on 29 March 2024. They confirm that all new blocks of flats over 18 meters being built from 30 September 2026 will be required to have two staircases.

There is an exception to this requirement where:
“a building notice or an initial notice has been given to, or a building control approval application with full plans made to, the relevant authority before 30 September 2026 and either the building work to which it relates:
a. has started and is sufficiently progressed before that day; or
b. is started and is sufficiently progressed within the period of 18 months beginning on that day.”

‘Building notice’, ‘initial notice’ and ‘building control approval application with full plans’ have the meanings defined in the Buildings Regulations 2010.

Building works are “sufficiently progressed:”
a. where the building work consists of the construction of a building, when the pouring of concrete for the permanent placement of the trench, pad or raft foundations has started, or the permanent placement of piling has started; or
b. where the building work consists of work to an existing building, when that work has started;
c. where the building work consists of a material change of use of a building, when work to effect that change of use has started.”

Background to the Two Staircase Policy

The second staircase policy was first announced by the Government back in December 2022. Then it was proposing to mandate second staircases in blocks of flats over 30 meters. The new policy was a response to the Grenfell tragedy in 2017 and growing public concerns about building safety standards.

public consultation, DLUHC announced the Government’s intention to lower the proposed height threshold to 18 meters. This reflected the views of industry experts including the National Fire Chiefs Council and the Royal Institute of British Architects.
DLUHC acknowledged the development sector’s call for “coherence and certainty,” and promised further guidance as the Government moved to bring England in line with many countries in Europe, North America, and Australasia where second staircase in tall buildings are already mandatory.

On 24 October 2023, DLUHC provided a further update confirming that there would be a 30-month transitional period from when the new guidance was published.

Planning considerations

Building Regulations are not expressly considered as part of the determination of a planning application. However, legally, buildings must comply with the relevant Building Regulations standards when they are built. It is essential therefore that the planning permission reflects the Building Regulations anticipated to be in force at the time of construction.

However, from a planning perspective, the update is no more than a technical formality with second staircases already being treated by planning officers and planning committee members, particularly in London (following the Mayor’s announcement in February 2023), as a requirement for planning applications for new tall buildings over 18m.

The uncertainty around when the new two staircase requirement would come into effect, and at what height, has therefore meant that many development proposals have been on hold. A delay many developers cannot afford in the current economic climate of rapidly rising construction and borrowing costs. It is predicted that in London alone, it has delayed the delivery of at least 38,000 homes.

Revising a scheme to add a second-core often results in the need for a substantial redesign and often impacts on unit numbers and the proposed mix of unit sizes. It is unlikely these changes can be dealt with as a non-material amendment by the local planning authority, and therefore means a variation (s.73) to the original permission is required. This involves a new round of public consultation and where relevant, in London, referral to the Mayor. This is a risk as it can open up the principle of development for reconsideration which may no longer be acceptable, or viable for the developer, if the planning policy position has changed. The redesign itself may also have already impacted on rental/sales values and viability given the addition of a second staircase will reduce the development’s utilisable internal areas.

Future considerations

It is yet to be seen whether there will be any material impact on the value of single-core assets going forward. Currently, it is understood, that the lack of supply to meet demand is meaning that the market remains good for single-core assets which have effective safety measures.

However, how this plays out in the long-term will be interesting. Those holding dated single-core assets, which cannot be reconfigured, may be facing potentially extensive capital expenditure to upgrade their safety systems and depreciating values in circumstances where fire safety risks cannot be appropriately mitigated.

Institutional owners, funds cognisant of reputational-risk and end-users themselves are also driving demand for second staircases. There seems to a general public perception now that one staircase is “dangerous” and two are “safe.” Industry experts consider this to be an over simplification, which fails to consider building safety in the round; a criticism which has been expressly levied at the Government’s updated technical guidance. Experts state that a box-ticking exercise will not necessarily result in safer buildings, nor, is it always necessary for there to be two staircases, where other safety systems can be effective.

For more thoughts on this, please see Charlotte Youngs’ (Senior Associate, Commercial Real Estate) blog on the topic here.

The Gateway Regime

• 1 April 2024
• Views

The introduction of the ‘Gateway Regime’ was one of the major building safety reforms arising from the Building Safety Act 2022 (BSA).

The Gateway Regime is a series of additional safety requirements (known as ‘gateways’) to be complied with at three major stages of the design and construction of a higher risk building (HRB) (i.e. those buildings that are at least 18m or seven storeys high which comprise at least two residential units or is a care home or hospital). Each gateway requires either consultation with, or formal sign off from, the Building Safety Regulator (BSR) before the next stage of the development can proceed. The BSR is the new building control authority for all HRBs in England.

Note: The Gateway Regime also applies to refurbishments of existing HRBs and other projects involving works on or conversions of buildings into HRBs. This note is intended to provide a brief overview of each stage of the Gateway Regime and how it will impact the life cycle of your HRB

Gateway 1: Planning and design phase – the fire safety statement

The first gateway is to ensure that fire safety matters in connection to the building have been considered at the planning stage. It has been a requirement for developers since August 2021 to submit a fire safety statement to the Local Planning Authority (LPA) alongside all planning applications for HRBs detailing the site layout, how fire safety will be managed in the building and how the emergency services can access the building among other matters.

The LPA will review the fire safety statement and will consult with the BSR before deciding whether or not to grant planning permission for a HRB. The LPA has the power to refuse planning applications where they consider the safety provisions contained within to be inadequate. An additional consideration to bear in mind for projects in London is that all major planning applications which require Stage 2 approval by the Mayor of London and relate to residential buildings over 30 metres must be designed to provide for a second staircase.

The Government has also recently announced that, from 30 September 2026, all new residential buildings in England above 18 metres must have a second staircase. Projects where a building notice has been given, or a building control approval application made, to the relevant authority before 30 September 2026 do not need to comply with the requirement for a second staircase provided that the building work has started and is “sufficiently progressed” by 30 September 2026. Compliance with the new rules around second staircases in England will be checked at Gateway 1. For more information on how this will impact your development please speak to our BSA team.

Gateway 2: Pre-construction phase

The second gateway is to ensure that building regulation requirements will be complied with and that building safety is considered during the whole construction phase.

The developer is required to submit to the BSR a building control application which demonstrates how the proposed construction works will comply with all applicable requirements of the building regulations. This is separate to the planning application process in Gateway 1 above and works of construction are not permitted to begin until the BSR has approved the application. The BSR has 12 weeks (8 weeks where works are to an existing HRB) or longer (if agreed) to either approve or reject the building control application.

While the statutory obligation to submit the building control application is on the developer, it is open for the developer and the contractor to allocate contractually responsible for Gateway 2 (and each of the gateways) and we can help you with the contractual negotiations in your sale contracts or forward funding agreements to achieve your desired outcome. We can also assist you in ensuring that key events in the approval process under Gateway 2 are accounted for in the contractual documents with sufficient time allowed for delays.

If the building control application has been approved by the BSR under Gateway 2, further points that could impact timing are:

• the developer is to notify the BSR at least 5 days before ‘starting’ the works;

• the developer is to further notify the BSR within 5 days of the work having commenced;

• ‘major changes’ to the construction of the HRB require BSR approval which can take up to 4-6 weeks to either approve or reject. While the ‘major change’ is being considered no work can take place on any area subject to a ‘major change’. A major change is one that has a significant impact on the design or fire strategy of the HRB; and

• ‘notifiable changes’ need to be referred to the BSR prior to implementation although these works will be able to proceed unless there is an objection within 14 days.

Gateway 3: Post-construction phase

The final gateway is to ensure that the building is safe for occupation. Gateway 3 requires the developer to submit a completion certificate application (or a partial completion certificate application if there is to be a sectional completion) to the BSR once the works have been completed and before the building is occupied. There is also a requirement to provide the BSR with 2 weeks’ advance warning before submitting this application so that they have sufficient time to manage workload.

The application will include handing over the ‘golden thread’ of information which includes as-built plans, documents demonstrating that the requirements of the building regulations have been met and signed declarations from the principal contractor and principal designer that the works and building comply with the building regulations. The BSR has 8 weeks to determine the application and an inspection will be carried out before deciding whether to issue a completion certificate.

If a completion certificate application is approved the legal owner of the building has to apply separately to register the building as a HRB with the BSR (automatic registration does not occur when a completion certificate is issued). It is possible to achieve partial approval of Gateway 3 with several parts of the building or development being able to commence occupation before others.

Residential parts of the HRB cannot be occupied before a completion certificate has been granted for the building and the building has been registered. It is a criminal offence to do so.

Conclusion

The new BSA regime is complex and carries serious consequences if breached. For more detailed advice on any of the points covered in this note please speak to member of the Forsters Building Safety Act Team who will be happy to provide further information and assistance. This note reflects the law as at April 2024.

Building Safety Act 2022 ‘key information for developers of higher-risk buildings’

• 1 November 2023
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On 1 October 2023, a host of secondary legislation published under the Act came into force. It created new obligations for developers of Higher-Risk Buildings, which supplement those already in place.

This note gives an overview of the obligations that a developer of a new Higher-Risk Building will now face.

The Responsible Actors Scheme

The Responsible Actors Scheme is intended to ensure that developers remedy any defects in existing buildings for which they are responsible. It works by requiring certain developers to enter into a remediation contract with the government and imposes consequences if they do not.

You will be eligible to apply for the Scheme if:

• your principal business (more than 50%) has been residential or mixed-use property
• development, you meet the Profits Condition and you have developed or refurbished (excluding work done solely as a contractor) one or more residential buildings over 11 metres in height in England between 5 April 1992 and 4 April 2022;
• you are a developer who meets the Profits Condition and have developed or refurbished (excluding work done solely as a contractor) two or more buildings eligible for a relevant government cladding remediation scheme; or
• you are a developer who has developed or refurbished (excluding work done solely as a contractor) at least one residential building over 11 metres in height that qualifies for remediation under the terms set out in the developer remediation contract, and you voluntarily choose to join the Scheme.

If you are eligible to become a member of the Scheme, you must:

• enter into a developer remediation contract with the government;
• in accordance with the contract terms:
  • identify residential buildings that are over 11 metres in height developed or refurbished by you over the 30 years ending on 4 April 2022, and any of those buildings known to have life-critical fire safety defects;
  • remediate and/or mitigate or pay for the remediation/mitigation of life-critical fire safety defects in those buildings;
  • reimburse government schemes for taxpayer-funded work to remediate and/ or mitigate defects in those buildings;
  • not undertake restructurings or certain other steps which would mean that you cannot fulfil your obligations under the Scheme;
  • meet all other obligations of the developer remediation contract, including keeping building owners, residents and the government updated on the progress of remediation works.
• comply with requests for information made by the Secretary of State pursuant to the contract and regulations, to enable the Secretary of State to carry out his monitoring and enforcement functions; and
• not take steps to avoid your obligations under the Scheme or defeat its aims.

If you do not do so, the consequences are severe. They include:

Planning prohibitions – You will not be able to carry out major development of land, which includes 10 or more residential units, residential schemes on a site of at least 0.5 hectares in size, commercial development of 1000m or more of floor space, and development sites over 1 hectare in size

Building control prohibitions – You will not be able to give or receive relevant notices (i.e., building commencement notices), certificates, and applications.

The dutyholder roles

The legislation creates new roles and responsibilities. The Building Safety Regulator (BSR) explains that, as a developer, your main duties will be as follows:

• to make (and review as necessary) suitable arrangements for planning, managing and monitoring a project, including the allocation of sufficient time and resource, to deliver compliance with building regulations. In practice, this means appointing the right people, with the right competencies (the skills, knowledge, experience and behaviours or organisational capability) for the work and ensuring that they have systems in place to ensure compliance with building regulations;
• where there are several firms working on different aspects of the project, to appoint a Principal Designer to be in control of design work and a Principal Contractor to be in control of the building work;
• to provide building information to every designer and contractor on the project and ensure that they are aware that the project includes any existing or proposed Higher- Risk Building work; and
• to co-operate and share information with other relevant duty holders.

Building control regime for Higher-Risk Buildings

The new building control regime, colloquially known as the ‘Gateway Regime’, commenced on 1 October 2023. There are three ‘gateways’, one during the planning phase, another during the construction phase, and the final gateway at the completion of the project. This section deals with the three ‘gateways’.

Application process

Before building works start on a new Higher- Risk Building a building control application must be secured. The application must be submitted to the BSR, which has 12 weeks to assess the application. As a developer, you will have overall responsibility for the application. The application must contain sufficient information to show how the building when built will:

• satisfy all applicable functional requirements; and
• demonstrate how the developer intends to manage the construction activity.

If it is determined that the new building will be a Higher-Risk Building, it must include the following documents:

• a competence declaration;
• a building regulations compliance statement;
• a fire and emergency file;
• a construction control plan;
• a change control plan;
• a mandatory occurrence reporting plan; and
• a partial completion strategy.

Each of these documents has particular aims and requirements and will need to be considered in detail.

Golden Thread

The “Golden Thread” of information in relation to a building is the information that allows a person to understand a building and the steps needed to keep both the building and people safe, now and in the future. The legislation places requirements for the Golden Thread to be managed throughout the life cycle of a building.

Once you have building control approval, you must give the BSR at least 5 days notice before commencing work. The Principal Contractor will then be responsible for managing the Golden Thread. That said, as a developer you must be aware of the Principal Contractor’s responsibilities and appropriately monitor whether they are performing their duties. Furthermore, the practical reality is that the Principal Designer will need to collaborate with the Principal Contractor, so this should be kept at the forefront of your mind. The Golden Thread must be:

• kept digitally;
• kept securely;
• a building’s single source of truth;
• available to people who need the information to do a job;
• available when the person needs the information; and
• presented in a way that the person can use.

Construction phase

There is no doubt that throughout the construction phase of any project, changes occur. There are new processes that must be followed in relation to changes. The process will depend on whether the change is a Major Change or a Notifiable Change. There are detailed provisions regarding what will amount to each, and legal advice should be sought if the position is unclear. The BSR has the power to change the category of any change, where it deems appropriate to do so.

It is essential that any Safety Occurrences during the construction phase are reported to the BSR, via the MOR system. As the developer, you will need to take all reasonable steps to ensure that the Principal Designer and the Principal Contractor have put an effective MOR system in place.  

Completion certificates

Higher-Risk Buildings need a completion certificate to enable the building to be registered or occupied.

Developers must now submit a completion certificate application once notifiable building work is complete. Occupation will not be allowed unless the BSR issues a completion certificate, which may take at least 8 weeks.

This application comprises of the following (which will be stored in the Golden Thread):  

• ‘as built’ plans and information;
• final versions of all accompanying documents that accompanied the initial application;
• any controlled changes and the change control log;
• information captured through construction;
• information captured through commissioning; and
• information captured through final functional inspections.

Upon receipt of the application, the BSR will conduct its final inspections of the building work and, if satisfied, will issue the completion certificate. If not, the BSR must reject the application. Errors can be corrected – but this will no doubt incur unwanted additional time costs and pressures.

Non-compliance and enforcement
Under the new secondary legislation, the BSR’s power to enforce non-compliance is strengthened. The table below identifies the offence of non-compliance and the penalty associated with the offence.

It is critical to take note that directors and managers of companies may be found liable for the criminal offences identified above.

Conclusion

In this current post-Grenfell climate, and in the wake of the host of obligations created by the secondary legislation, it is critical that developers of new Higher-Risk Buildings are acutely aware of their obligations and seek legal and other professional advice where necessary. The BSR has the power to enforce penalties against the company as well as directors and managers personally.