Government ‘could provide interest-free funding’ to help firms at risk of going under due to cost of fixing buildings, says lawyer

The government should seek to safeguard firms from building safety liabilities passed down the supply chain, a lawyer from a leading law firm has said.

Ben Smith, partner for Fenwick Elliot, told the Building the Future Conference in London this morning that claims for building safety remediation “flow down the supply chain” which sometimes means companies with low amounts of cash or operating on small margins, who are unable to take on significant increases in losses, are hit with building safety liabilities.

He said he wondered whether there is something that can done “vis-à-vis government funding” to help firms where a liability could send them or projects under.

He said: “The government could step in and do some kind of interest-free funding to carry out the remedial work, to pay for it, [the firm could then] pay it back in installments.

“Now there are difficulties with that approach, state aid, all those kinds of issues. But it seems to be that there has to be some way of safeguarding the industry while at the same time carrying out all this remediation.”

Rachel Davidson, director of specialist knowledge at the Building Services Engineering Association said some members are stepping back from work on higher-risk buildings.

“Our members generally on the whole, actually being more selective about the contracts that they will pitch for in terms of projects…unfortunately as a trade association we see a lot of long-running family businesses go under because of one particular contract.”

Clive Pople, pre-construction director at Kier Places, said: “There’s a real challenge using industry at the moment. These smaller contractors who are actually better sometimes at collaborating than us as tier ones, have got a lot to actually offer to us, they’re going to be very selective.”