27 November 202327 November 2023 derek

Our report from Barratt’s 2023 AGM

Politics

It’s almost two years since Michael Gove announced a “reset” of the Government’s approach to the building safety crisis, with a principle of “protecting leaseholders and making industry pay” – but there is still a very long way to go until most leaseholders can get their lives back. We will be engaging directly with several key developers in the coming months, to urge them to make homes safe at the pace leaseholders and residents need and deserve, while ensuring leaseholders are not left with liability for any other costs.

Barratt Developments, the UK’s largest housebuilder, signed the developer “pledge” in April 2022, followed by the Developer Remediation Contract in March 2023, which committed the company – alongside 51 other developers, so far – to remediate life-critical fire safety defects in buildings above 11 metres in height that they had developed over a thirty-year period. 

The financial provision that Barratt has set aside for remediation is larger than any other developer, therefore we were keen to engage further with the company.

Thanks to the support of ShareAction, we attended Barratt’s Annual General Meeting (AGM) on 18^th October to ask the Board about their progress on building safety, as we had previously done in 2021 and 2022. 

The pace of remediation since Grenfell has “not really been in our control”

At Barratt’s AGM, we asked: 

• Could the Board please outline the percentage of buildings where remediation has been completed, started or yet to start – and explain the urgency behind making all homes safe, sellable and insurable?

• Could the Board also explain why Barratt is commissioning its own assessors, which appears to be reducing the scope of work on some remediation projects, which could leave leaseholders liable for fixing the remaining defects?

• And finally: Would the director responsible for Building Safety be willing to meet with the End Our Cladding Scandal campaign to discuss these important issues further?

In response, David Thomas, Group CEO, emphasised that the company had been clear from an early stage that they did not believe leaseholders should pay. Regarding the pace of remediation to date, he pointed out that since Grenfell there had been “quite a lot of changes in approach” from the Government, as well as from other stakeholders such as banks, “which have not really been in our control.” For projects where responsibility has transferred from the government’s Building Safety Fund to Barratt, he acknowledged that there have been “challenges with getting the right PAS 9980 assessments,” but said “we are not trying to downgrade assessments.” 

Mike Scott, Group CFO, would not be drawn on the number or proportion of buildings where remediation had been completed, but he shared information from their latest annual report that the company has 278 buildings “under review” as potentially requiring remediation.

Barratt’s directors were also very happy to arrange a meeting with our campaign team to discuss further.

Another shareholder at the AGM asked how much money Barratt still had left to spend on cladding remediation. The CFO responded that £536m was currently held on the balance sheet, which included £213m of additions in the year due to new buildings being identified, as well as other changes such as cost estimates being revised.

Serious consequences when progress stalls on a remediation project

The same shareholder asked if the Board could give any examples where remediation had been completed, so that they could go and see it for themselves. The example that was given to them at the end of the AGM was Dalston Square in Hackney. We were very surprised that this example was chosen; it indicated that very few projects must have concluded so far, and that senior executives cannot have appreciated the serious consequences arising due to the delays in completing this project.

It is nearly three years since scaffolding was first erected at Dalston Square, but delays – including a six-month pause due to a dispute with a contractor – mean that several of the buildings will not complete remediation until 2024. Anti-social behaviour has increased due to living on a building site for so long, a risk that the constituency MP had previously raised in Parliament, but the warnings were ignored. Just a few days prior to the AGM, a firework was thrown at a flat where remedial works are still taking place and one family lost everything in the resulting fire. It’s clear that project delays, here and elsewhere, leave buildings in a vulnerable state for far too long – so we would urge Barratt to ensure that work is completed as soon as possible, to prevent any further impact on residents’ lives. 

We will be attending the AGMs of other publicly listed developers in the coming months to ensure that boards, and their shareholders, are aware that we will continue to hold them accountable and challenge them on their progress, until all homes have been made safe and leaseholders are protected from further costs.

A follow-up meeting was arranged with Barratt in November, and we will report back on this meeting in a future blogpost.

CALL TO ACTION! 

Do you own shares in a property developer, freeholder, insurer, mortgage lender or any other company that is connected to the building safety crisis? Or would you like to support the campaign by asking questions at an AGM of a specific company, if we are able to source a share?

Attending an AGM can help to open the door for further engagement with a company, so that we can progress the campaign’s aims on behalf of all leaseholders. We would be happy to help you prepare your question in advance so that you can relax and even enjoy the experience on the day! The feedback from one leaseholder who attended an AGM was that “it took an embarrassingly long time to come down from the adrenaline high!” Please contact us if you would like to get involved in shareholder action.

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