Local Government and Housing Committee

I will, Chair. And could I just confirm the timing, because I know you have a very busy agenda?

We have one hour in total for this evidence session, but a brief presentation to begin with is absolutely fine.

Sure, okay. So, first of all, diolch, thank you very much for your time. We realise you're very busy. We very much appreciate the opportunity of appearing before you. We would like to just make a quick presentation to give an overview of where we think we are now, because we remain deeply concerned about the slow progress that we're making in Wales on this crisis.

However, in addition to thanking yourself, I'd also like to thank and make a public thanks to our colleagues in the Welsh fire and rescue services, because, in our view, they've been magnificent in supporting us over the last few years and, to some extent, as we'll come on to, they are also a victim of this crisis in terms of the pressure and workload that has been put on them, but we'd like to express our gratitude and thanks for their professionalism and support.

The key thing I think that we want to emphasise today is the need for urgency with regard to this crisis. I think by now we'll know that on 14 June of this year it will be six years since the Grenfell tragedy. Six years is an awfully long time, and we remain deeply concerned about the slow rate of progress in Wales. And with that in mind, we recognise that none of us want to be here today. I'm supposed to be retired, Gareth has retired, and we have a lot of different victims caught up in this crisis. We're also clearly of the view that the crisis is not of our making, it's not of the making of the people that we propose to represent, and neither do we think it's the making of the Welsh Government. Developers and builders created this problem. But, at the same time, one of our concerns is that there seems to be a lack of understanding of the impact that this crisis is having on many hundreds of decent, ordinary people who did the right thing. They worked hard to prepare often for, like myself, a pension, to get on the housing ladder et cetera, et cetera, and they had surveys done, they bought what they thought were effective properties, and they've turned out to be disasters.

And the range of victims, as you can see, is very, very high. We have pensioners whose pension plans are in turmoil, we have many young people. I know, in some blocks, people have had to move on, because they're trying to start a family; they need to move in order to change careers or jobs, and they're stuck. So, there are many different victims of this crisis. And I want to remind you here—if I can just refer to this, because I can't see your screen; too far away—that this was a letter sent from a leaseholder I know. He's in his mid to late 70s. He's a retired teacher who has done everything correct in his life, and he and his wife live just four minutes away from here, and this is a letter they wrote to Julie James back in December 2020 about the effect the crisis was having on their life. And personally, I know this gentleman; I'm not going to name him, because I don't want to embarrass him, but I have seen physically in his face and his mental condition the impact that the worry that this crisis has had. And just as that gentleman in 2020 urged Julie James to recognise that, we think that is being lost in this whole issue—the human cost. And one of the fundamental problems that we think is at play here is that, as I'm sure many of you know, the corporate entity is a very tough animal. It only understands two things: it responds to the law of the land and profit erosion. And profit erosion is often competitor activity, customers moving away or Government regulation. And it's quite clear that developers have been incredibly profitable over the last decade or two in the United Kingdom, and there's a figure there—they've made profits equalling £31 billion in the last 10 years. So, these are people who can afford to repair our fire and build-defective homes. It's not a question of the Government needing to fund this; developers have the money to fund it.

But the problem we have—and we've lived this now, or I've lived this, almost seven days a week for the last four years—is the corporate leadership of the companies involved. Their salaries are not based on responding to our needs. They only respond to the force of law, and I'd like to come back to that, because that's a key issue and concern we have about how we're currently approaching the problem in Wales, as opposed to the actions that are being taken in England. And just to illustrate that—I won't go through every one of these—it is concerning that, in recent times, the Minister, Julie James, has repeatedly thanked and commended developers for signing her pact and co-operating. And we get a lot of very positive words from developers, and you'll see down in the bottom right hand—I think this comes, maybe, Gareth, from the pact or the pledge—it talks about working in 'Good Faith', 'Work Constructively', 'No Liability', 'At Pace', 'Be Assured', 'As quickly as reasonably possible' and 'Within one month deliver a proposal'. And we have this very stark contrast between people using a lot of nice positive rhetoric and their feet moving in a different direction. So, at the same time that Richard Akers, the chairman of Redrow, is saying lots of positive things, I and my own development are in deep litigation with that company, which we don't want to be involved in. So, our whole approach is that, for years, developers have obfuscated and deflected responsibility for this crisis. The only thing that makes them move is legislation, and that's quite key. And I'd also—[Interruption.] Yes.

If I could just make one comment while we've got this slide up, because it's a very interesting thing. But, in those quotes that Mark just ran through, which come from the pact and pledge, which are identical, essentially, the last one has an actual date or time in it: 'Within one month deliver a proposal', and that is the one thing that has not happened. The one concrete date that was in there simply has not happened. Sorry, Mark—carry on.

Again, our concern is, at the moment, that in recent weeks, the Minister has been praising the likes of Taylor Wimpey and Bellway, but we know from on the ground that Taylor Wimpey are not engaging and communicating effectively with leaseholders in Victoria Wharf, Cardiff. And you will know that Victoria Wharf has had some three, thankfully, very minor fire incidents in the last six months or so. And we also know that if you go across the bay to Prospect Place, where Bellway are involved, they were apparently undertaking some remediation work, but their contractor has now gone bankrupt, or there's some other corporate crisis, and they've ceased working. So, again, we have this contrast between lofty rhetoric and the reality of what is actually happening on the ground. And there's a disconnect there that we think needs to be addressed.

Here are some pictures of demonstrations that we've been involved in over the last couple of years outside the Senedd. They're all on different dates. I think some of you in this room attended on 14 June last year, to commemorate and honour the victims of Grenfell. But we're getting tired. We're now entering six years post Grenfell. How long do we have to endure the 24/7 pressure of this issue before something is actually done to solve what is a relatively minor problem for Wales? It's a minor problem, relatively, because Wales has only 160 at-risk buildings; there may be some debate around that, but it's around 160. The smallest London borough will have many more hundreds than 160. So this is a relatively easy problem fix.

I won't go through these, because you can look at them later, but you'll see some statistics in terms of what's been going on in England in recent times. There, they've received 2,830 private sector registrations. The problem in England is massive; in Wales, it's a relatively minor problem. The other issue that we've experienced over the last couple of years is that we're very conscious we've become a bit of collateral damage in what might be described as a devolution and devolved power squabble between the English and Welsh Governments. But at the end of the day, we know that the English solution is not perfect—there are still many considerable problems with the English solution, particularly with buildings under 18m, and with the rate of progress. But the fact is, England is making progress. We're in touch with a sister development of ours, sold by Redrow, built by Laing O'Rourke in Birmingham, and we've been in touch with them over the last three years. We learnt last year that have now received £12 million from the English building safety fund, and they started an 18-month remediation programme in June of this year. They're moving on. We have exactly the same situation in Celestia. We have heard nothing from Redrow, and we are nowhere near to resolving the serious build defects.

I want to make the point that we're not saying England is perfect—there are lots of problems in England. But England is making progress: remediation is going on, they have a building safety Act, they have a building safety fund that is distributing moneys. They also—I don't know if you know this—have an enforcement agency, which is staffed by a former Royal Marines special forces general, who is being given full responsibility for pursuing developers and building owners, who even hide behind special-purpose vehicles. We have it on good faith that they're even considering the hiring of private investigators to track down people who are responsible for the buildings. That is a very different landscape to what we have in Wales. We have no enforcement agency, we have no enforcement plan, and that's our concern.

Recently, the Minister in the Senedd talked about being trolled because she constantly says how complex the crisis is. I don't know who's trolling her, because from the bodies that I represent we've always simply tried to be adult and ask questions and challenge the Welsh Government. But the fact is, as this slide demonstrates, there are solutions to this problem. There's a gentleman some of you might know called Liam Spender, who's a very key legal figure in the English scenario, and he says:

'This is not a difficult problem to solve. It has already been solved elsewhere in the world. The government needs only to look to Australia and Scotland for working model examples of how to resolve this problem.'

And we contrast that, six years post Grenfell, with the Minister's continued statements that this is a very, very complicated problem. It is complex, it is difficult, but there are clear solutions to it.

Our view—and I'll be closing very shortly, Chair; I'm conscious of time—is that the role of any Government is to protect citizens and to legislate. The Welsh Government was handed a solution by the English Government. It enjoyed widespread cross-party support in Westminster, and was subjected to deep scrutiny. It's called the English Building Safety Act 2022, and it contained important provisions that protect citizens in England. Sadly, on 16 November, as you will know, the Welsh Labour Government voted against fast-tracking those provisions into Welsh law. We see that as a serious mistake. The Welsh Government is not here to negotiate or project manage hundreds of individual remediation projects. The role of Government is to legislate and ensure clear playing fields.

At the moment, and I paraphrase Feargal Sharkey, who you might know as a famous 1970s pop star who's been very high profile in the manner in which some of our water companies throughout this great land are polluting our rivers—. In criticising the English Government, Feargal Sharkey said that the role of Government is not to act as a marriage guidance counsellor—it's to act. Unfortunately, we worry at the moment that the Welsh Government is trying to act as a marriage guidance counsellor and bring together corporate developers and other parties involved, and is in some way almost appearing to try and project manage hundreds of complex building projects. Our view is that that is not the role of Government. The role of Government is to legislate and ensure that the laws are effective to protect citizens. So, again, our question is where is the urgency.

I'm conscious of time. In my pack I will just show you—. I'm not going to go through it, but there are pictures that we've taken from developments that show the poor-quality work. You will know that, for some buildings, it's not just the lack of firebreaks in the wall. There are also serious build defects. Again, do you not think that it is staggering that in 2006, a major development just four minutes' walk from this building was developed where, within a few years, it was regularly flooding? How on earth can that happen in 2006 and 2007? And that flooding exists to today. That dock was always going to flood, yet we have major corporations who were given planning permission approval, and built such developments. It's shocking what's happened.

I will close on this, Chair, because I'm conscious I'm taking too much time. We have effectively three demands that we would like to place before you. The first is that the Welsh Government legislates to protect Welsh home owners. Under current legislation, there is no Welsh Government body, including fire and rescue services, that can take any action against any developer or building owner. This is not the case in England, as I've already said. Currently, in England, they have a Building Safety Act, they have a functioning building safety fund, and they have an enforcement agency. We've learnt in the last couple of months that enforcement agencies are now acting. The terms of the Act, sections 116 to 125, provide local authorities and fire and rescue authorities with powers to issue what are called remediation and contribution orders. They can go direct to the building owner and enforce them and say, 'You need to fix this building'. We do not have those laws in Wales.

At the moment—and this is the tragedy of the situation—only Welsh citizens can legally pursue developers and leaseholders for remediation. In my own development, Celestia, that's what we've been forced to do, because one part of the Defective Premises Act 1972 has recently been changed for time limitation from 12 to 30 years. Unfortunately, that's I think a terrible indictment of the situation—that private citizens are having to take on, at their own cost and risk, large corporates who've made billions in the last decade, and who continue to be facilitated by the Welsh Government with extensive planning permissions and help-to-buy support. That cannot be fair.

Our second demand is that the Welsh Government starts to immediately release funding from the £375 million building safety fund. We keep hearing about the £375 million building safety fund, but, as we're aware, no money is flowing from that fund to help developments, in contrast to what I've explained is happening in England. The other thing that we think the Government should consider is actually, if the Government is not prepared to litigate on behalf of citizens, perhaps it should consider funding private citizens to litigate against developers using the Defective Premises Act, which does apply in England and Wales. Because it's quite clear that, under the Defective Premises Act, some of the defects that I've reported today mean that leaseholders would win, and in order not to burden leaseholders who are already facing significant costs in terms of waking watch and engineering reports, we would ask the Government to consider funding citizens to litigate using the protections of the Defective Premises Act.

On the point of the £375 million, thanks to my colleague Rob, we recently asked for a freedom of information request on how much of the £375 million Welsh building fund was being spent. As of, I think, the end of February, we were advised that around £75,000 has been committed—it's not even been delivered—to a number of buildings with respect to survey fees. I'm not a mathematician, but I have some very smart colleagues who work for us, and I think, Gareth, that comes to 0.00002 per cent.

It's 0.02 per cent.

Well, it's actually 0.00002 per cent of £375 million. So, our view, and we stated this before, is the £375 million seems to us like an accounting entry, which is similar to what developers have done. Developers over the last few years have put away £130 million, £200 million to deal with these, but until that money moves to victims and solves this problem, it's just an accounting entry. Again, our view would be that that is not acceptable.

The final and third demand relates to easing the pressure on our fire and rescue services and local government professionals. At the moment, we believe that our fire and rescue service professionals are in a very iniquitous situation. We have this bizarre situation in Wales where they cannot take action against the people responsible for this crisis—the developers and the builders. But they are able to take action against leaseholders and management agents. I mean, it's insane. So we think they should remove the legal cost and risk from ordinary citizens. We should not have to prosecute this case. We believe the right way to do this is to give our fire and rescue services and local government regulatory authorities the powers to issue contribution and remediation orders against developers and building owners. How on earth can it be possible that our fire and rescue services can issue orders against ordinary citizens who did everything right and do nothing against those who actually created this crisis?

One final point, because I've taken far too much time. The First Minister—and I'd like to register our respect for the loss of his partner in recent months—said about a year or two ago:

'the Welsh Government does intend to provide funding of that sort'—

in relation to a question on help—

'but to do it in a way that does create the moral hazard in which the public purse pays for the problems that developers themselves have created and lets those developers off the hook....If the public purse'—

and this is the important thing—

'simply steps in and picks up all those Bills, what possible incentive will there be for the next developer to make sure that their buildings do not suffer the same defects?'

I would agree with a lot of that. But again, if you step away from the words and look at the feet, what the Welsh Government has been doing recently is the exact opposite of what the First Minister advised. Because it is bailing out powerful, rich, profitable developers and builders. We only need, again, to walk four minutes away from this building and right next to Celestia, my own development, there's a Cardiff Community Housing Association development, a social housing development, built by Laing O'Rourke at the same time that Celestia was built that was awarded £1.95 million from the Welsh Government to remove the exact same wooden cladding that exists in our 457 private development, which is a 10-second away walk. And we have persistently asked, 'Does the Welsh Government intend to pursue Laing O'Rourke to recover the £1.95 million of taxpayers' money that they have given Cardiff Community to rightly fix fire-defective homes?' And, again, I want to make clear that we are delighted that any home is being repaired, but how can it be fair that the Government appears to be operating a two-track approach? If you live in social housing, the Welsh Government is prepared to actually fund your development, but if you live in the private sector—and I don't want to make this party political, but it is difficult not to fall on that line—how can it be fair that private home owners are left to go it alone and try to prosecute these big powerful corporations, when they have all the power? It's not fair.

So, I'm going to end on that. I apologise for taking too much of the time, but we think those are some very essential points. I would like to thank you all for your time. We know you're very busy, and I know that you have some questions that you tabled before, and I think, between us, we'll be very happy to lend them. And, if you want a little bit more, Geoff is chairman in Swansea of a development called Altamar. He is currently battling with other developments, so you can get other stories as to what the situation is. But, diolch yn fawr, and thank you for your time and attention.

Okay, Mark. Well, thanks very much, and it is useful to have had that presentation, because it does deal with quite a number of the issues and questions that we would raise, and I'm sure that questions will arise from the presentation itself in any event. But let me just begin, then, with a couple of initial questions, before we bring in other committee members. You had on your slides examples of some of the defects to buildings—fire safety and otherwise—is there anything that you would add to that to bring to the committee's attention in terms of the sort of defects that are at play here, or do you think your slides adequately covered that?

That's a very good question, Chair, because I think one of the issues that faces all developments is that we're not sure what else we're going to find when remediation is under way, and that has big issues on cost recovery, et cetera. But we know, as I mentioned, there are missing firebreaks, there are problems, which you will be familiar with, with cladding and so forth. The issue also, I think, which relates very much to the legislation, is that there are two types of defects here: there are fire-related defects and there are building defects. And, in my presentation, there was a picture of one angle, where, at Celestia, we have had failed render. That is render falling off the side of the building, and, of course, that is a real risk to the public and to residents. Gareth, I don't know if there's anything else that you would like to add. Or Geoff?

Yes. I think this is a really important issue, because, obviously, what's happened in the UK is that we were all transfixed, in that sort of ghastly way, when the Grenfell Tower caught fire, and there's been a lot of focus in England and Wales on fire defects. Now, the building safety crisis is pretty much worldwide, and we know that they have been addressing problems in—it's actually very much the old empire/Commonwealth, but, you know, Australia, New Zealand, the States, Canada. They've all got these problems, but in some of these jurisdictions, it's looked on more as a construction issue, and you hear expressions like 'leaky building syndrome' so that the fire issue is only one side of the story. And, interestingly—I said 'interestingly' in a very neutral way—I'm sure that we're all aware of the earthquake in Turkey and Syria, which has taken place in the last week or two, and I just picked out a quote from something that I saw, and the numbers were staggering, but apparently, more than 160,000 buildings containing 520,000 apartments collapsed or were severely damaged by the disaster. Now, we've rather ignored the dangers inherent in other construction defects, and yet, it's not just Turkey. We can, of course, say to ourselves, 'Well, we never get earthquakes in south Wales', even that's not strictly true, as, again, I'm sure we're all aware. We're not expecting major earthquakes, but construction is a real issue.

I'm sure you've also picked up in the media within the last few months the collapse of the tower block in Florida that killed a lot of residents and has triggered concerns about other blocks in Florida. Now, I don't want to be alarmist, but it was suggested to us at one point that we might have similarities in our development in the way that the building was constructed and in potential defects in the building to the building that collapsed in Florida. Now, I've been reassured since that that is not the case, but we're overlooking things that fall outside the fire defects. It is missing a large potential part of the problem. Of course, the issue here with all of these construction defects is that, by and large, you can't see them. You don't know what's wrong with the building until something does go wrong, and then you hope, when something does go wrong, you get a bit of notice, because you hope it's going to crack a bit, or let in a bit of water, or something that will give you an idea, and that you're not going to see the dramatic failure that we've had, say, in Florida in one case, in Grenfell Tower in another.

The other thing that I would just flag up, since it's also been in the news recently, is the death of a small child in I think it was north London, where I think there's been a manslaughter verdict because of the state of the building and the apartment that they were living in, and the dangers of mould and damp and all these things, because these are all part and parcel of a crisis. The English Government's focus in the pledge that was then followed, in virtually identical terms, by the Welsh Government in their pact, is entirely focused on life-threatening fire defects; it doesn't apply at all to any of these other potential defects, whether life threatening or not. Clearly, they are life threatening, they're life threatening both in terms of the conditions in which people are living inside buildings, and they're also life threatening if lumps of concrete render start falling off a 15-storey tower, which is the sort of thing that we're potentially seeing. So, I hope that helps expand—.

Yes, it's very useful. Thank you, Gareth, it's very useful context. Anybody else like to add anything in terms of the problems?

Yes, in my case, Altamar in Swansea, there are 158 flats. Since four years ago now, we've been served with this order from the fire brigade in the area of Glamorgan. What does all this mean? It means that we haven't been able to sell any of the properties in that building. Apart from that, many, many other things have happened. Because of this notice, the insurance premium for the buildings and contents has escalated beyond—it's frightening for us as residents and leaseholders. On top of that, we keep finding, because we're digging under the surface of this building—and I know all this myself because I witness it every day, we're looking at things—. I want to give you one classic example. We've tried to contact Bellway and get them involved for these four years, and they've refused. We've contacted the chief executive officer, we've gone as high as we can, and we get no response from them whatsoever.

So, recently, if I can just quickly paint a picture, on the communal corridors in this building—and there are seven floors involved—every 20 m or so, there is a fire door that, by design, is meant to try and compartmentalise, in an emergency situation, where there's smoke generated, for example. In between that compartment, maybe there'll be four flats. There's a floor-to-ceiling grill 2m wide, a louvred grille, with an automated actuator in it. We've just found, out of 43 of those devices—. Now, this building was first built and occupied in 2004 or 2005. Two weeks ago, we did an in-depth survey ourselves and we found that the delivery retaining straps were still in place on five out of those 43 devices, and they were installed and never removed. And we found it out because when we were doing our weekly evacuation test and smoke alarm test, we discovered that these weren't opening. The electronic signal told us that they were opening, but we discovered they weren't. So, the point I'm making is that there are so many other really, really dangerous issues that we're finding as we peel back the veneer here, and Bellway just don't want to know. They don't engage with us. And what's really peeved us leaseholders in Altamar is that, on the north side of Swansea, Bellway has been granted permission to build 200 houses. Now, how can that be? How can that be? They should be stopped today, because they don't even engage with us.

Could I just make a point on that? I mentioned the enormous profits of the developers in recent times, and if you look at their accounts, they've basically been making 30 per cent return, which is why a few years ago, Persimmon was in a massive public argument, because the chief executive had like a £300 million bonus, or something crazy. They've been making 30 per cent return for a long time, but if you look at the quality, it's a toxic industry. It's built by the lowest bidder, and I can match Geoff's story: we had a soil stack problem in Celestia. The soil stacks are the pipes in the building that remove human waste, and one failed. And when we went behind—this is a very famous, iconic story now—they found a bend that was held up by an empty Starbucks cup. The reality is that a lot of these buildings were thrown up, and the level of quality and professionalism is just not there, and you have to ask yourself—. It's 30 per cent or 20 per cent. I was in Switzerland the last two days with a world-class engineering company, global, works around the world. It makes 6 per cent return. It's trying to get to 10. For decades now in the UK, developers have been making 30 per cent return, and you wonder why, when you see some of the corner-cutting that we experience.

And, you're very much concerned with the longer term strategy. There is a view increasingly emerging that a lot of people who bought these developments, bayside developments in London, all around the country, and in Wales, they were sort of led to believe that their service charge will be £1,200, £1,500 and if you're in central London, maybe £2,000. When you look at the quality of some of these builds and you look further down the road, all you can see is massive refurbishment costs when you start replacing lifts, power plants, and I think most of the leaseholders have no idea what is staring at them down the road. So, this is a toxic industry, and again, one of the concerns we have in Wales is that there's a lot of supply-side influence on the Welsh Government. Later on today, we're attending a meeting, the strategic meeting, and around that table are many representatives from organisations that you could say, 'Well, weren't you partly responsible for this?' But you won't see many leaseholders, and that's also a concern, because developers are very powerful; they exercise a lot of political influence.

And longer term for Wales, we could be staring at some very significant problems as these buildings age. In my building, I was sold, I think—is it 125 or 199-year lease—I was sold a 125-year lease. I later discovered, when I became involved, the nominal life of the Celestia building is 50 years. Fifty years. I mean, it's—. So, I think there may be some questions longer term for Wales, and what's going to happen, because there is an argument that it's another huge misselling scandal. People had no idea what they were entering into.

No, okay, I'm just conscious of time—

Yes, sure.

—and we need to press on.

Sorry, did you want to make a point?

Yes.

Sorry, yes.

It covers something you were going to ask anyway about dialogue with the developers and builders, and follows on—

Yes, we'd be particularly interested, I think, in the extent of any remediation or defect addressing that's taken place.

I've got two copies of letters. I only brought two copies, I'm sorry. It's an example of the problems that we are facing. So, there are three letters.

Yes, are you aware of any remediation, any defect repairs that are happening in Wales at the moment?

Well, with our development, as you'll see, we actually managed to get Mike Hedges and Carolyn Harris involved and they wrote to Bellway, because we were not getting anywhere with them. Bellway responded with a letter and the points at the bottom are of particular concern to us because they point out, 'The legal documentation for the pact is currently being finalised and once this has been done, we will be able to progress with remediation of buildings in Wales, including Altamar.' And then they go on to say, 'The Welsh Government has conducted its own surveys on buildings in Wales and once the pact has been agreed, this will be used to formulate our remediation strategy for the building.'

The problem that we have and the questions that arise from that single letter are: when will the pact be signed? We have no date at all; we have nothing to look forward to on that point, and we know, as Bellway just said, they will do nothing until that is signed.

The second problem that we have is that when they do agree to do something, they will be looking at the surveys that the Welsh Government will provide. Now, in a meeting in the Senedd on 8 Februray, it was pointed out that PRP, the company that does these surveys, will not release any reports until all of the surveys are completed. And Julie James goes on to explain the problems and the delays with some of the surveys being carried out, because they can't get access or they need to close off main highways. But she says, and I quote,

'So, it's not that we need to put an end date on it'.

So, again, we have no date for when the surveys are likely to be completed. You might have the pact signed, but no surveys; you might have the surveys ready, but no pact signed. And I do not understand why all of the surveys have to be completed before any of them can be released. We know our survey has been done. The Welsh Government came in, spent two days going around, and it's there. So, why can't we see it to see what is in it and then compare it with what we believe are our problems, so that we're ready to go to Bellway and say—when they eventually decide to come and talk to us—'This is what is really the situation'?

We've spent £66,000 on five different, intrusive, in-depth surveys on our property and we gave the Welsh Government, when we were prompted to, to register our interest in having that money reimbursed. That was over 12 months ago.

Okay—

And we are paying for surveys, sorry, that we are providing to the Welsh Government who are not necessarily duplicating them, because they're not as in-depth. So, they could have used our survey from qualified people as a baseline—they didn't need to actually spend the money on having their own surveys done and the time delay. Sorry.

No. Okay, Rob, well, thanks for that. I'd better bring in other committee members. Obviously, you've covered a lot of ground and a lot of points that might have been raised. Jayne, is there anything that you'd like to ask or have you already heard the answers to the questions you would have asked?

Yes, thank you, Chair, and thank you to everyone for your presentation and for the detailed answers to the questions so far as well. Yes, I was going to ask about your specific concerns, but I think you've covered that. But I think, in the opening introduction part, you said that you felt that, with the developers, there is positive rhetoric, but their feet are moving in a different direction. And you also mentioned that the only thing that's going to make them move is legislation. Perhaps you can just—. Is there anything else you could touch on in terms of why you feel that legislation is necessary?

At Celestia, we're probably at the tip of the spear in that we had problems in our development from 2010; it was built in 2007. We battled away and got nowhere, and then we were told we were out of time, so there was no responsibility that Redrow or Laing O'Rourke had. Then Grenfell happened and the world changed, but still because of the poor legislative framework, developers were still able to deflect, obfuscate, 'Sorry, can't help you. Nothing to do.' When the Defective Premises Act came into operation in, what was it, March or April—

1972.

1972. Sorry?

1972.

Yes, 1972, but when did the extension—?

Oh, the extension. Yes. That was June 2022—28 June.

So, when in June 2022 the Defective Premises Act time limitation was shifted from 12 to 30 years, after years of fighting Redrow, within a matter of months, we were able to get them in front of a Welsh court and then to pursue them and we're now in litigation with them. Okay. The point I'm making is that, after years of trying endlessly—you've seen these colleagues here endlessly appealing and getting absolutely nowhere, banging their heads against the wall—the moment the law changed, we got Redrow in court. And its back to my point: these are not socially conscious people. They're basically builders who started off small and got big and they made a lot of profit. They're not sophisticated; they're deal makers. And I believe—. I've spent the last 35 years working around the world with large corporations, and the one thing I understand is cultures, both good and what I call toxic cultures, and if you look at the way that the leadership of this industry has responded to this crisis, we've not had one apology about what's happened and the chaos that this has caused. And the only thing—again, I repeat—that large corporations respond to is the force of law and competitor activity. And that's why we need legislation in Wales.

Thank you. Thank you, Chair.

Thanks, Mark. Thanks, Jayne. Joel.

Thank you, Chair, and thanks, everyone, for coming in today. I've got to apologise, I've got a bit of a cold so I'm all full up, so I'm speaking a bit nasally. I wanted to just ask two questions, really. The first one is: you've mentioned about the engagement that the Welsh Government has had with the developers, and there seem to be a lot of warm words coming from both sides, the Welsh Government and the developers. I've asked questions in the Chamber about the surveys that Robert actually raised as well, and I just wanted to get some idea of your thoughts regarding the engagement you've had from the Welsh Government. What has been your experience of that, really? I sense it's probably not been very good.

And then the second question I wanted to touch upon was: you highlighted the remediation and remediation contribution orders that exist under sections 116 to 125, and I just wanted to get an idea of how much of a game changer that would be for you and why there's a delay or a reluctance to enact that here in Wales.

Shall I—?

Yes, I've spoken enough.

I'll have a go at answering that. If I start with the second point, sections 116 to 125 provide for these remedies, which can be taken by—. In the case of England, they've actually set up a special enforcement agency within the Department for Levelling Up, Housing and Communities, but the way that the legislation is framed, it means that action can also be taken by local authorities and the fire authorities. So, it takes the onus away from the leaseholders in taking action against developers and builders and puts it, or at least it gives—it doesn't necessarily put the onus on the local authorities and fire authorities, but it gives them that option, and we would certainly expect them to grasp the nettle and get on and do that.

And the second thing is that it potentially simplifies the whole process, now that we're going through a phase and they are going through a phase in England now, where some of the first test cases are coming up, because the legislation is very simply phrased in terms of liabilities. So, if you bring an enforcement action, instead of going through the process that we're currently going through in the High Court, which is literally costing millions of pounds—our projected legal spend on our side is now in excess of £2 million in order to bring that action—you'd be getting a truncated process, much cheaper, much quicker, and being brought by local authorities and fire authorities, and potentially, I think, in Wales, the obvious thing would be to have a central authority, particularly since the problem is much more compact than in England anyway, and that would streamline the whole process.

I think you can see just from that description what a huge game changer it would be, and it's my personal view that what you're going to see with developers and builders is that once the jig is up, attitudes will start to change, and we'll start to see movement. It only takes one. It only takes that first example, that first precedent of one of the developers being held liable, being forced to remediate a building, and the others will fall into line. It changes the picture entirely, in my view. Your first point, I've now forgotten—

It was about engagement.

Engagement with us might be a better one—. I'll pass that to someone else.

I think it's been very disappointing. We've always taken the view that public citizens' safety is not party political, surely, and as I said at the outset, we don't hold the Welsh Government responsible for this, but given the situation we face, we look to our Government, elected officials, to provide protection, and that's been poor. For the last three or four years, we've been asking the Welsh Government to act as a facilitator to set up a forum to bring people like ourselves together. We've had to work very hard to connect with people in Swansea. We know there are some outliers in, perhaps, north Wales, and we think there might be one or two developments in Swansea.

But as Gareth explained, we're so busy fighting on so many fronts, dealing with fire enforcement notices, dealing with developers, lawyers, engineers, management agents, to then spend time to try and pull together a group has been very difficult, so we've constantly asked the Welsh Government, 'People are writing to you, you have contact details—you pull together a forum.' It would seem to me the most obvious thing to do. But I think it was in 2022 that some of my colleagues started engaging with the Welsh Government about setting up a forum, and I think it took four meetings and the best part of nine months, and they still hadn't agreed a terms of reference. We had a couple of meetings at the end of 2022, which tended to last 45 minutes, and we said, 'Look, there's so much complexity and issues to this, we can't deal with this in 45 minutes.' So, we then had one long two-hour meeting, which was very productive, in that we had a very frank exchange of views and we provided very detailed responses on the detail of what I've explained today, why we need 116-125, what's happening on the ground, and the Government said, 'Well, it depends on which you think is the best approach—working with people or legislation.' We said, 'Well, we know where we come from.' But we thought that was positive. We got the sense there was some listening, but they were still going to do it their way, and we were happy to continue that.

Then, we received an email saying that the situation was going to change, and we were then being invited to a strategic committee group—I don't know the exact title; I'm attending the first one this afternoon—where we were being asked to sit around a table with lots of supply-side people, people from RICS, managing agents, et cetera, et cetera. Our position has always been that we're very supportive of a very rigorous, robust, future building safety agency—I mean, any country needs that—but our priority is the here and now. So, we went, Joel, from a situation of having one quality to our meeting to then being told, 'Well, do you want to join this group?', whereas we were quite happy engaging with that. So, it's been poor.

My own impression is that it sometimes suits the Welsh Government to have a divide-and-rule, because it's what developers do; they play you off against each other. So, I think it's been poor. I think the Welsh Government has all the resources, the power, to contact people and say, 'We're going to have a town hall in the Senedd'—or one of the buildings you occupy—'Come along if you're a representative and share.' I've had to do it, Rob's had to do it, in the evenings, late, trying to connect with people, but we've got other lives to live, never mind managing all the complexities that we're currently managing.

In England, End Our Cladding, they meet regularly with the Secretary of State. They're miles ahead in terms of the consultation that they have. It's disappointing.

Can I come in on one other point on 116 to 125? From memory, we're talking about getting builders to carry out remediation work, and I think that's covered with 123, but 124 allows them to go after moneys that have been spent or need to be spent—perhaps with orphaned, you know—. We have a development, South Quays, down in Swansea, where I believe they've spent over £300,000 of their leaseholders' money to get EWS1 certificates, and we are desperately trying to find out how to go about getting that money back from the building fund, because everything that you read about the building fund is to do with paying money back for surveys that you've done, or this or that, and there's nowhere that it's very clear how to go about getting money back that you've had to spend as a management company to make sure that you're complying with urgent work that needs to be done, or, as in their case, the complete package to get the EWS1.

If I could just come back, John, just so you know what's happening in England, Mr Graham—former general Graham—Cundy, who heads the recovery enforcement unit, we understand that he and Michael Gove have given local authorities and fire services access to £10 million to facilitate early issuing of the remediation and contribution orders.

Could I quickly make a comment about values, because I know that this, I think, underlines a lot of what we've really been talking about? It does, I'm afraid, come down to money and the financial position that leaseholders have found themselves in. I was just looking at some of the questions that were put to us just beforehand: what difficulties have been faced by leaseholders trying to sell or remortgage properties? And the answer is that the only way in which leaseholders are able to sell a property is via auction to a cash bidder. And the evidence that we've had—. We're doing some work on it now to try and solidify this, but, from the specific examples that I'm aware of, you're talking about having to sell your flat, should you need to, at 50 per cent as an average, possibly less, of what you would expect its true value in good condition to be. So, that's a hugely significant issue. When you think about leaseholders, who've obviously got mortgages on their properties, that immediately puts them in an extraordinarily difficult position.

How supportive have lenders been? Well, it's been impossible for leaseholders, I think, to move to fixed-rates mortgages, to take advantage of better rates, et cetera, by moving to other people. My understanding is that, if you've got a mortgage with somebody, then you've got a mortgage and they will live with it, but you'll end up paying a variable rate, and possibly much more through the nose than you would have to. And going forward, it's a major issue that I've yet to see addressed, because it's all very well to try and get to the point where the mortgage lending industry starts to lend on these buildings again, but that still leaves the key question, which is: what value will they attribute to these buildings?

Can I come in? I used to work for a mortgage broker. At the time, it was the largest in Wales, and I believe it still is. And I spoke to them yesterday to try and get some background. And they primarily deal with new build—people like Persimmon and whatever—but they have been involved in the past with high rise; I've done a few mortgages myself on properties. And they've come back and said that clients have come to them looking to buy flats in high rise—no luck. They've talked to existing clients about remortgaging—no luck. They haven't been able to do a single case.

There were a lot of headlines about lenders being prepared to lend on high-rise buildings et cetera, all front page. But you have to look at the detail, and the detail is that they will only consider it if there is an EWS1 certificate in place or there is a remediation order in place where the work is to be done. We don't have the facility to get remediation work or whatever in Wales at the moment. We don't know when the pact—. I keep repeating: we don't know the pact's going to be signed. Will that be good enough for the mortgage lenders? I don't know. But, certainly, people who are living in high-rise developments at the moment are stuck there.

Altamar’s got 158 flats, and I did a check: since March 2019, two properties have been sold, for cash, to a cash buyer. Nobody can get a mortgage. And the point we have to make is that none of this is the leaseholders' doing, and we are living in buildings that are dangerous, certified as dangerous, and nothing is happening.

Okay. Well, thank you all very much. I'm conscious of the time. Sam, is there anything that you would like to ask very quickly?

Yes, briefly, Chair. And also, just for the record as well, I wasn't expecting the points about the Welsh fire and rescue services you mentioned; I have a close relative who works for the Welsh fire and rescue service. Just for clarity on that one.

Just on the point the Minister has made previously and has considered whether Welsh Government pays upfront for remediation and seeks to claim that back from developers—. I just wonder what your thoughts are on her considering that as a—

Well, I think it's already been done, Joel, in Australia, in certain states in Australia. It's an obvious solution, given the stance that developers have taken up until now, so—. We just want our lives back.

So, you think it's something that should be pursued.

Yes. My worry is the time. If we're only thinking about that now, six years in, how long is that going to take? That's our worry. It's the urgency and the priority that is the problem.

Okay.

Getting the money flowing is hugely important, because nothing is going to happen without the money flowing. My concern as a taxpayer would be, if the Welsh Government simply paid, they're doing precisely the opposite of what the First Minister—

But the Welsh taxpayer is already paying.

So, what the Government is then going need to do is it's going to have to legislate in order to do that and in order to recover the money, because, at the moment, it doesn't have the ability to recover the money. So, legislation is required anyway. But, one way or another, the money needs to flow, and anything that does that is helpful.

Can I ask just one more?

Yes, Sam.

Just on the previous points you raised earlier about the mortgage situation and the ability of people to sell—how does that contrast with what leaseholders are able to do in England at the moment? So, are we seeing mortgages flowing in England on similar properties now or not?

I think—. Again, I think there are, but it's still sketchy. England is not a perfect solution and we've never said that.

Fundamentally, the position is the same in England. The only difference is a factual one—obviously, where buildings are being remediated, then they become mortgageable.

Yes, of course.

I expect, as more remediation orders are issued, then the building societies will look more favourably on those developments, because they have a plan in place to put things right. It's very early days, but they have the facilities to move forward. We don't.

Okay, thanks.

Okay, Sam. Mabon, similarly, is there anything?

I'm going to make a contribution in Welsh.

Yes, sure, of course. Thank you.

Do you want to test it, Mabon?

Is it working? Could we have confirmation that it's working?

Yes.

Thank you very much. Thank you for coming in this morning. You've mentioned some pots of funding that have been provided by the Government, which haven't been delivered so far. There is a leaseholder support scheme from the Government, and I was just thinking what impression do you have of that support scheme. Have you seen it at all? Is it effective? Is it adequate support for leaseholders?

I think we're on record as saying we never thought it was a good idea. It's nice in principle, but it does nothing to address the root cause that these buildings are unsafe. We felt that it diverted resources to another area. It also potentially put the Welsh Government in an invidious situation where they would be potentially purchasing unsafe homes. So, what do you do then? Do you rent them out? If there's an incident, there's a whole issue. But it did go ahead; we predicted it would fail. I think, within the first six months, we heard that there had only been 10 applicants, and we then understood that it was being relooked at in terms of eligibility criteria.

I have to be careful, because there's very few people, but I have spoken to people who have been involved in it. The first person I talked to said that it all seemed like they were making it up as they went along; they were required to hire a solicitor to represent them; they were asked for information that they said, 'Well, surely you have this already', and they didn't. The other interesting thing we learned was that it wasn't the Welsh Government that was going to purchase; they were trying to persuade social housing groups in Wales to purchase. So, it was a bit disorganised and chaotic. The latest I heard is from someone who said, which is interesting in terms of what the Minister said, that it was progressing, again proving very difficult, but the interesting thing was, should the social housing group buy it—and they didn't seem very keen about it—the person involved couldn't then rent the property back, which was contrary to what the Minister had stated, because the Minister stated, 'You can either leave and move on in your life, or, if you want to, continue to live there.' So, our impression at the moment is that we don't know too much, but, from what we hear anecdotally, it's not impressive, but fundamentally we think it doesn't do anything to address the core problems that we've talked about—the buildings still remain unsafe. The buildings need, as Geoff said, to be made safe, and then everything moves forward.

It also produces an extraordinary position where, if somebody falls on one side of the qualifying line, then they get 100 per cent help, and, if you earn an extra £2 a month or whatever, and you fall on the other side of the qualifying line, you get nothing. That in itself seems particularly odd, but we're a mile away from it being workable because nobody understands at the moment, if the Welsh Government does buy a flat from somebody—and, again, it does come back to the finances—at what price? We literally have no idea at what price, and either the price will be a good one, which will have some relationship to what the value of that ought to be, which makes it a very bad deal for Welsh taxpayers and a very good deal for the leaseholder from which the flat is being bought, but it also, as I say, then emphasises this fact that all help is then being concentrated on a minority, whereas the person who is slightly better off receives nothing. So, you could have this ridiculous situation where my flat is worth £100,000, and my next door neighbour, who has a slightly lower income, has just had his flat bought by the Welsh Government for £200,000. We just think the whole thing is completely misdirected and will achieve nothing.

I think the word is 'moral hazard' for the Government. A very good solution would be, for me and I know lots of other people, if Redrow wanted to buy it back, because I'd sell it at what I'd purchased it in 2007 just to get my life back. So, if any of you have any contacts with the developers, I know a lot of people would happily—. I would, and you can ask them to speak to me—I'd happily sell it for what I paid for it in 2007.

Seconded.

Altamar has got a new, unusual situation now. There are two flats where the owners have died intestate. So, what happens? We can't the mortgage—or the solicitors handling the properties can't get a mortgage—to sell it, we as leaseholders stop getting any service charge, so we have to make up that deficit by increasing the other leaseholders' contributions. So, there's another facet of this awful issue.

Finally, quickly, you've named Redrow, Laing O’Rourke, Bellway and other companies. Do you think that they should have building agreements in Wales in the wake of this?

No. I think your colleague made the point that there's a—. One of the biggest questions in this is why has the Welsh Government been so slow on this in terms of what's clearly an open goal of social injustice. It's something that I still wrestle with. One theory is that they're worried that, because we have a huge house building problem in Wales, if they go hard on developers, they'll leave Wales. I think it was your colleague Rhys ab Owen in the Senedd who said, 'Well, if that's the situation, are those the kind of house builders we want in Wales?' We have a big issue about employment. One option, thinking strategically, would be let's grow quality small and medium enterprise builders in Wales. Because, as you know, Michael Gove describes the developers as a cartel. He talks about the wild west. I think today we've seen some of that. If you were a car manufacturer and you built a car that could potentially explode and ignite, we know what happens: it's universally recalled. Why can't that be the case for houses in Wales?

Thank you, all, very much. Diolch yn fawr, Mabon. Thanks very much for coming in to give evidence to the committee today. You will be sent a transcript to check for factual accuracy. Yes, six years—I know that terrible tragedy at Grenfell Tower and the awful fire has created an awareness of much wider problems, as you say, as well as the very obvious and serious problems around fire risk. We're trying to come to terms with that, I think, across the UK, and there are so many issues, but for those caught up in it, such as yourselves, we do understand that, as you say, you very understandably want to get your lives back. We do very much understand that. But thanks for coming in to give evidence today. We will proceed to take further evidence before we report. Thank you very much.

Thank you very much. Could I just finally say 'thank you' to Mabon and Joel for their continued support in the Senedd? It's very much appreciated. And thank you, Chair, for your time. I very much appreciate the opportunity to appear before you. Thank you.

Diolch yn fawr. We will break briefly and come back at 10:50, if that's okay. Thank you very much.