28 October 202228 October 2022 derek

Another 5-7 years until all Barratt buildings are made safe: Report from Barratt’s October 2022 AGM

Politics

Companies use Annual General Meetings (AGMs) to show shareholders how well the Directors are running the company. With the right planning, and access to company shares, they are a good opportunity for campaigners to raise issues with key decision-makers.

Thanks to our friends at ShareAction who lent him a share, Dave Richards from the London Cladding Action Group and a member of the End Our Cladding Scandal campaign team attended developer Barratt’s AGM on 17 October 2022. The meeting was held on a hybrid physical/virtual basis with a small number of other shareholders in attendance, able to speak directly to the Barratt Board of Directors.

In his opening speech, David Thomas, the Chief Executive of Barratt, did mention the building safety crisis – something that he didn’t do when we attended their AGM last year. He highlighted that out of their 2021/22 profits, the company had put aside £396m for remediation of building safety issues on existing buildings.

This was then followed by questions from shareholders. A shareholder asked for more information on how the estimate for building safety liabilities had been reached, and whether it would definitely be enough to ensure leaseholders would not have to bear any costs or whether that number might increase in the coming years. David Thomas said Barratt had “limited experience” of remediation work so far but they had combined this with figures from the wider industry to get an average per building, which was multiplied by the number of plots where they needed to take responsibility for remediation (he did not reveal the number), with some build cost inflation and contingency on top. But he did reveal the magnitude of work needing to be done, by admitting that it will take 5-7 years until all Barratt buildings are remediated.

We later learned that the shareholder who asked this question also lives in a building that needs remediation work to make it safe – although he said it is still unclear what exactly needs to be done and there is still no timeline. He told us that the cost estimate for his building had reduced considerably since Barratt had announced the costs would not fall on leaseholders.

We asked the Board how many Barratt buildings were impacted – and how many of these had been made safe already, how many were currently undergoing remediation work, and how many had yet to start? None of these questions were answered.

Dave pointed out that in another 5-7 years it would be 10-12 years since Grenfell. How did Barratt feel about their homeowners being trapped for such a long time in unsafe homes, unable to move, and paying excessive interim costs for waking watch and buildings insurance? Should the company be reimbursing them?

Chairman John Allan responded that Barratt were acting out of a “sense of moral obligation” on building safety and said that the Government had “behaved badly; they didn’t need to threaten [the company]” with commercial consequences if they didn’t sign the developer pledge.

He was sure the threatened consequences “would have been struck down by a court” and said that he had been “quite grumpy about government action” on this issue. He also revealed that he had had “a contretemps” with a previous Secretary of State about this earlier in the year.

Barratt had signed the pledge but had not signed a legal contract because “the draft from the Government is not in a form that any builder could sign up to”. They thought in its current form it would require shareholder approval and a special resolution and they don’t expect anyone to sign it as it stands. The Chair said they were “working constructively and positively with the Government,” but highlighted the challenges of working with a third Secretary of State within a year.

He said Barratt were taking responsibility even where it is “not crystal clear” that buildings were unsafe at the time. In his words, “builders had not been negligent or deficient” but safety was now being assessed under “today’s lens”.

He added that Barratt were pleased to see the Government were starting to take action against freeholders and that there were other parties who needed to take responsibility too: “We won’t shirk our responsibilities but equally will resist taking on other people’s liabilities”.

David Thomas said they had been demonstrating by their actions “since 2018 or 2019” that they were not passing remediation costs on to leaseholders, and that they have also helped with other costs like waking watch “where they can”. But their position is very clear that it is the Government’s responsibility to address insurance costs.

In a direct conversation later, the CEO implied to us that Barratt weren’t overly concerned about turning the pledge into a legal contract, saying that “it makes no difference to us” whether it is a legal contract or not. He suggested that so much Government focus on this single issue is misplaced – although said that he understood it was “symbolic” to leaseholders. We pointed out that it was more than just symbolic when banks won’t lend mortgages on properties without a definite remediation plan.

The CEO said he was open to engaging further and invited us to email him with any follow-up questions.

Dave found it very useful to attend the AGM and to ensure the boards of developers are aware that we are not going to go away. We will continue to hold them accountable; we will challenge them and bring the building safety crisis to the attention of their shareholders. We strongly encourage other affected leaseholders to attend the AGMs of the developers and builders who have failed to provide a safe home in which to live.

Take a look at the ShareAction website for tips on how to get involved.

The post Another 5-7 years until all Barratt buildings are made safe: Report from Barratt’s October 2022 AGM appeared first on End Our Cladding Scandal.