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What does Building Safety Levy mean for the construction sector?

19 April 2022

David McNeice, Partner and UK Head of Construction and Infrastructure at DWF, comments on the new Building Safety Levy.

He said: "The latest announcement on the Building Safety Levy is welcome to some, but a very bitter pill for others.

"'It is almost five years since the Grenfell Tragedy. It has taken a considerable amount of time to get this stage, from a problem that has been 20-30 years in the making; but the underlying cause of delay relates to still not truly understanding the extent of the problem.  We still do not know how many properties are going to be affected, how many individuals are in danger and the costs of remediating this.  There is no quick fix for understanding this.

"It is welcome that the Levy has been set up, and the biggest house builders are putting their hands in their pockets to pay out.  But those that are paying, some would argue, in the most serious cases, are not the cause of the problem.  It is the developers who have left "orphan buildings" (i.e. – those buildings constructed where developers have failed or are overseas and can't be pursued) in their wake. These must be looked at first, and are those that this levy must support. But more than that, many factors have played into the situation the industry now faces; lack of oversight, a race to the bottom for pricing, profits over safety and no way of maintaining a golden thread of building information have all led to the current cladding crisis; so why is it the major developers that are being asked to pay for this?

"The Building Safety Bill, and its significant changes to the landscape of how the built environment will now look, is coming. This will definitely go in some way to improving the Golden Thread of information and holding those responsible for building safety accountable.  It just so happens to be coming in at a time of crisis in the professional indemnity market (which is only going to get worse with the 15 year retrospective liability the Bill intends to bring in) and a cost of living crisis. It is right that homeowners aren't being asked to pay for these problems. I hope that is universally accepted; but if it wasn't homeowners directly, it would be all of us by virtue of tax.

"There is no right answer to this problem; but the recent news is welcome for the many, if not the few.

"With money going in to the levy, hopefully we can see buildings being made safer, but as we look to the future of the Building Safety Bill, we do so knowing this problem is not going anywhere fast."

If you require any further information, please contact David McNeice.

For more insight, read our report

Further Reading