The Week That Was - 11 April 2025

Welcome to the week that was, a round-up of key events in the construction sector over the last seven days.

Update on Building Safety Levy

The Building Safety Levy, introduced by the Building Safety Act 2022, is a tax on new residential buildings in England requiring building control approval.  The purpose of the levy is to fund building safety remediation efforts and ensure the industry contributes to addressing safety issues.

• Government recently published the outcome of its latest Building Safety Levy technical consultation.  The key points of the update include:
• The Government will be delaying implementation of the levy to Autumn 2026 – a year later than initially planned;
• Levy rates will range between £6.35 and £50.17 per m2 for previously developed brownfield land (subject to a 50% discount) and between £12.70 and £100.35 for other sites;
• The rates apply per m2 of chargeable floorspace, not per unit;
• The sanction for non-payment of the levy will be the withholding of the building control completion certificate, or the rejection of the final certificate.

The full update is here.

MHCLG takes responsibility for all fire functions

From 1 April 2025, the responsibility for all fire functions was transferred from the Home Office to the Ministry of Housing, Communities and Local Government (MHCLG).

The transfer was prompted by a key recommendation from the Grenfell Tower Inquiry's Phase 2 report which advised that fire and building safety should be overseen by a single department.

The Phase 2 report criticised the dispersed nature of regulation for overseeing standards of competence.  The Government intends that the transfer will reinforce accountability and improve co-ordination by centralising responsibilities.

The Fire Brigades Union has welcomed the transfer, calling it an important step in repairing long-standing issues with fire and rescue services.

The Home Office will retain responsibility for certain fire-related functions, including the Airwave Service Contract and the Emergency Services Mobile Communications Programme.

You can read more, please click here and here.

Importance of understanding the effect of assignments emphasised by the Court

In Grove Construction (London) Ltd v Bagshot Manor Ltd [2025] EWHC 591 (TCC), the Court considered whether to enforce an adjudicator's decision against the assignee of the benefit of a building contract.

The contractor entered into a building contract with the employer and a dispute arose upon the employer failing to release the retention owed to the contractor at the end of the rectification period.  The employer, having gone into administration, assigned the benefit of the building contract to an assignee.

The contractor commenced an adjudication against the assignee to seek payment of the unpaid retention and the adjudicator found in the contractor's favour.  The assignee refused to pay and the contractor commenced enforcement proceedings. The assignee successfully sought a declaration from the Court that the assignment did not give rise to any liability on its part under the building contract where the burden of the contract had not been transferred.

This judgment underlines the importance of understanding which rights may and may not be transferred on assignment.

You can read the full judgment here.

Public Accounts Committee report on the remediation of dangerous cladding

On 21 March 2025, the Public Accounts Committee (PAC) issued a report on the remediation of dangerous cladding.

According to the report, the Government still doesn't know how much it will cost to carry out fire safety works including the removal of flammable cladding.  However, it is now estimated that there are between 9,000 to 12,000 medium and high–rise buildings with fire safety issues, and that the total cost of remediation, to both the public and private sector, could be between £12.6 billion and £22.4 billion.

MHCLG has capped the taxpayer’s contribution to these costs at £5.1 billion, but PAC says the Building Safety Levy may need to run for longer than the anticipated 10 years to recoup any public spending in excess of this cap.

MHCLG’s Remediation Acceleration Plan (the Plan), published in December 2024, set a target of 2029 for completing remediation on all high–rise buildings over 18 metres and for completing, or having a completion date, for all buildings over 11 metres.  However, because up to 7,000 unsafe buildings are yet to be identified and remediation works have been slow, PAC is sceptical about the adequacy and achievability of the Plan.  PAC have asked MHCLG to provide an update on the Plan within 6 months.

The report also says industry research shows that premiums for high–rise buildings doubled between 2016 and 2021, and PAC has therefore recommended that MHCLG should urgently:

a. undertake a review of insurance premiums so it understands how rates compare for those building that have been remediated under both the new and old standard; and

b. consider what more it can do to: i) help bring down insurance premiums for residents awaiting remediation works; and ii) address the risk that insurance for buildings remediated in accordance with the newer PAS 9980 standard is unaffordable even after works are compete, and ask the insurance industry to provide information about the overall costs of insurance premiums in high-rise buildings post Grenfell and the increased insurance company payouts to policy holders.

You can read more here.

Government recommends mediation

On 31 March 2025, MHCLG issued guidance on the dispute resolution process to be used to resolve disputes between the 54 developers who, as of 14 October 2024, have signed the Government's developer remediation contract, and third parties such as managing agents, building owners, leaseholders, freeholders and residents of any building, lenders and insurers, who have not already agreed a dispute resolution mechanism.

Clause 16.3 of the developer remediation contract provides that, where there isn't already a contractual mechanism agreed between the developer and a relevant third party to resolve disputes, the Government may 'facilitate' the adoption of a dispute resolution process to assist with the resolution of any such dispute by issuing guidance, statements, directions, recommendations or similar, or otherwise.  Any such dispute resolution process, if adopted, must be implemented following good faith consultation with the developer, and be modelled upon best practice and principles of fairness, independence, neutrality, proportionality, accountability, competence and effectiveness.

Developers will probably be relieved to hear that the Government has decided to recommend mediation and not adjudication as their preferred dispute resolution process for developer remediation contracts.

You can read more here.

New Bedford theme park to create 20,000 construction jobs

The UK Government and Bedford Borough Council have entered into a deal with Universal Destinations & Experiences to deliver a multi-billion-pound theme park and resort - Universal’s first branded resort in Europe.

The scheme, to be built on a 476-acre site at the former Kempston Hardwick brickworks in Bedfordshire, is set to become the largest visitor attraction in the UK.  The developer expects the site to attract 8.5 million visitors in its first year of operation and could generate up to £50bn for the UK economy by 2055.  The project will include rides, a 500-room hotel, a leisure and entertainment district, and extensive retail and dining space.

Prime minister Sir Keir Starmer has said the deal will bring “around 28,000 jobs across construction, AI and tourism” (with around 20,000 of those in the construction sector alone) ahead of its opening in 2031.

Construction partners and architects for the project are currently unconfirmed. 

You can read more here.

With thanks to: Emily Snow, Tess Turner and Jonathan Carrington.

Disclaimer: The information in this publication is for guidance purposes only and does not constitute legal advice.  We attempt to ensure that the content is current as at the date of publication, but we do not guarantee that it remains up to date.  You should seek legal or other professional advice before acting or relying on any of the content.