On Friday 15th December 2023, two members of our team, both leaseholders in Bellway buildings, went to Bellway’s AGM in Newcastle. We would like to thank ShareAction for their support in arranging attendance.
It was interesting that, ahead of our attending the AGM, Bellway emailed ShareAction to offer a meeting instead. This was politely declined – with the full backing of ShareAction – and we have arranged a follow-up meeting for February. Despite attendance being confirmed for our second Bellway leaseholder through their broker, Bellway also requested (the day before the AGM) that this leaseholder not attend but accept a meeting instead so the journey to Newcastle would not be “wasted”; this was again politely declined, as our attendance had been confirmed and we wanted to continue to push the contracted developers to adhere to the commitments they had made.
At the AGM, we highlighted that it was six and a half years after Grenfell, and thousands of buildings across England, Wales and Scotland still had serious safety defects – this has severely impacted our lives and life choices with the majority of leaseholders still being trapped.
As noted in multiple areas in Bellway’s latest annual report, Bellway signed the Government’s Self-Remediation Terms (SRT) for both England and Wales, in March and May this year, and they have agreed in principle to the intentions of the Scottish Accord, which is yet to be finalised.
Bellway’s annual report states that since 2017 the company has set aside a total of £583m for remediation of building and fire safety defects, which is the highest of any UK developer, and that £478m of that (or 82%) remains in a provision on the balance sheet, yet to be spent.
The pace of remediation remains alarmingly slow, despite developers such as Bellway first pledging to fix their buildings in April 2022 and then signing the Government’s contract from March 2023. The Government may now be heaping praise on these developers for “doing the right thing”; however, our lived experience paints a wholly different picture as we struggle to obtain answers on just when our homes will be made safe. Many leaseholders have been stuck waiting for years for Building Safety Fund applications to be progressed and now face similar delays as the developers – by minimising the work required to make homes safe – continue to focus on their profits rather than the safety of residents. We wanted clarity from Bellway in key areas and asked the following two questions once the AGM opened up to the room:
- Leaseholders and residents would understandably like to see urgency in homes being made safe, sellable and insurable. Can the Board outline the number of buildings where remediation is yet to start or not yet completed, whether the pace of remediation will increase going forward, and when they expect the programme to be complete?
- Can the Board also describe what additional support it can offer to people who may be trapped for years, often unable to sell or remortgage whilst paying sky-high insurance costs?
At the time of our AGM attendance, the Department of Levelling Up, Housing and Communities (DLUHC) October 2023 data release reported that Bellway has:
- 502 Relevant buildings developed over the previous 30 years for which the group has now accepted responsibility.
- 195 buildings assessed and found to require remediation.
- 170 buildings that are set to be remediated directly.
- 245 buildings where it is not yet known if remediation is required.
We remain concerned that the board was unable to give definite timeframes for remediation of developments in their portfolio with fire safety defects. Our discussions with the board after the meeting led us to believe that the Government data was still far from sufficiently robust – Bellway’s CEO, Jason Honeyman, told us that the data provided by DLUHC was not accurate enough for any conclusions to be drawn, and this was repeated by Keith Adey, Group Finance Director, when he spoke to us after the AGM. We did not disagree with these comments as developer data is a key area on which we have had several meetings with the relevant DLUHC teams to raise our concerns in recent months.
The word “remediation” is used 39 times in Bellway’s Annual Report – usually in what seems to be a self-congratulatory manner. Unfortunately, the lived experience of many of Bellway’s customers does not tally with these noble statements.
Whilst the data returns are still clearly a work in progress, the current statistics released by the Government report that only 6% of Bellway’s buildings have been made safe. “Better with Bellway” is Bellway’s focus for 2024 – “a responsible and sustainable approach to business” – with a clear statement in the report that “As a result, we expect a step up in the level of remediation work carried out by our Building Safety division on legacy schemes in the current financial year”. However, the data returns provided to the Government suggest otherwise and confirm a commitment to start to remediate only 23 further buildings in the next year.
At the current pace, Bellway confirms, “Work is now completed on 9 developments, underway on 12 developments and works are due to commence on a further 2 developments in the first half of the current financial year”. The data shows that several developers are making very slow progress on remediating buildings they have assessed, with Bellway having a total of 195 assessed buildings requiring remediation. Assuming the same remediation rate were to apply to non-assessed buildings, Bellway would potentially have a total of 357 buildings requiring remediation; however, Bellway is only committing to start a further 23 buildings in the next 12 months. At that pace, it would take Bellway 12 years to complete their programme.
Mr Honeyman provided Bellway’s perspective on the reasons for the pace of remediation being slower than they “would like” – this was apparently due to the many stakeholders involved and the permissions required to gain access for inspections and remediation work, as well as issues with understanding what remediation or mitigation is required for non-cladding defects.
Whilst we understand that developers are not the only stakeholder in remediation, and we have heard from other developers we have met that there are access issues with one particular freeholder, there are several things a responsible developer could do to mitigate such blockages. We will discuss this further with Bellway when we meet them in February.
During the AGM, we also asked what additional support Bellway PLC could offer to people who may be trapped for years.
On the specific issue of reimbursing costs that have been paid by innocent leaseholders in the years since the catastrophic events at Grenfell Tower, Bellway’s Fire Safety FAQs page explicitly advises in three of the answers that “Bellway will consider any costs that have been met already and will work with managing agents in identifying such costs which will be reimbursed as part of the pledge agreement”. At face value, this appears constructive and befitting the actions of a responsible developer although it is uncertain whether reality on the ground fully meets this seemingly helpful statement. To help us understand the veracity of this statement, we requested clarity on the number of buildings where costs have been refunded, the source of that funding (e.g. directly by Bellway or through warranty claims), and the amount that had been reimbursed. Our view is that it is important that Bellway makes clear its position relating to all known and future such instances – for example, what estimates have been made by the board in respect of the amount required to honour the apparent commitment on their website, and on what basis is the board’s consideration taking place so that it meets the group’s stated Corporate Social Responsibility commitments.
We also asked about the issue of latent defects that are uncovered during remediation works – specifically, we asked the board if they would tell us Bellway’s position in respect of the comments made by the Secretary of State in the House of Commons on 14th March 2023, i.e. that any new faults identified during replacement of cladding are the responsibility of the developer if they were the original responsible actor. Whilst we recognise that such defects may be deemed to be outside the strict terms of the Self-Remediation Contract, we noted that latent defects are being identified regularly at remediation projects once work commences, including at the home of one of our team who attended the AGM.
During the AGM, as we continued to push the board for answers, Jason Honeyman told us that some of our questions were straying outside the business of the AGM. We responded that we did not believe that was the case, as the AGM business included accepting the Annual Report and Accounts, our questions related to those documents, and it was clearly imperative to fully understand the enormous provision of over half a billion pounds that Bellway had set aside for remediation. This was important both for us as leaseholders and for Bellway’s investors, and it was a figure we had highlighted in our conversations with Bellway’s auditor prior to the AGM commencing.
Whilst we were provided with some responses at the AGM, not all of our questions were answered in full. We have emailed these questions requesting a formal written response, and we have been advised by Bellway’s Group General Counsel and Company Secretary that he will be “aiming to reply” by Friday 26th January. We have agreed to a follow-up meeting with Simon Scougall, Bellway’s Group General Counsel and Company Secretary, Bill Kenneally, Managing Director of their Building Safety Division, and Paul Lawler, their Group Head of Communications, on February 15th. We will report back after the meeting has taken place.
The End Our Cladding Scandal campaign calls on the Government to lead an urgent, national effort to fix the building safety crisis.
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