Bellway has put aside an additional net legacy building expense of £20.3 million to help owners of legacy apartment schemes undertake fire safety improvements, bringing the total amount towards fire safety provided since 2017 to £131.6 million.
Some £91.6 million of this provision, relating to 24 developments, most of which are over 18m high, remains unutilised at 31 January.
The company also revealed in its interim results that it has established a fire remediation team to work with building owners to help resolve historical issues where current safety standards did not exist.
Bellway said it is committed to assisting remediation work where it considers that it may have a contractual responsibility to ensure that apartment blocks meet with the current interpretation of building regulations, which were in force at the time they were constructed.
Bellway’s review efforts were initially directed towards buildings over 18m, where Aluminium Composite Material (ACM) cladding had been used in the construction of the external wall envelope. The scope of the review has since widened, following the ‘Advice for Building Owners of Multi-storey, Multi-occupied Residential Buildings’, issued by the Ministry of Housing, Communities and Local Government in January 2020.
The firm therefore now approaches this issue, with the benefit of sector-wide hindsight and, by applying revised guidance which clarifies the government’s interpretation of the extant building regulations that were in place at the time of construction.
The reviews, which often include the results of investigative surveys, consider whole external wall systems to determine whether the combination of materials used adequately prevent external fire spread, thereby rendering the building safe.
However, differing regulatory frameworks result in ongoing changes with regards to the scope of potential remediation works. Furthermore, obtaining a supply of suitable replacement materials, and appropriately skilled remediation experts, proves to be an enduring challenge.
As a result, while a prudent approach has been taken, there continues to be inevitable labour constraints and upward pressure on costs as Bellway works with third parties to establish fully costed remediation solutions on the 24 developments.
While the company has captured most issues and all known liabilities are provided for, the extent of the provision could increase in line with normal accounting practice if new issues are identified, as building owners continue to undertake their own investigative works on other schemes within Bellway’s legacy portfolio.
Bellway is actively pursuing recoveries from previous suppliers, subcontractors and professional advisors where they have fallen short of the standards required.
