Manchester property developer Urban Splash and four companies linked to it have been ordered to pay £46.5 million towards essential fire safety repairs at seven residential developments across the city. The government had originally sought to recover more than £60 million spent or set aside to replace dangerous cladding and fix internal building defects across the sites. The tribunal agreed that more than £60.6 million worth of work was reasonably needed. The decision is one of the largest amounts the government has recovered under powers introduced by the Building Safety Act 2022.
The ruling was made by the First-tier Tribunal (Property Chamber) after a legal case brought by the Secretary of State for Housing, Communities and Local Government. However, the panel reduced the final amount to reflect wider failures by the government and regulators, which were highlighted by the Grenfell Tower Inquiry.
Why the government claim was trimmed
A further £741,594 will be paid to the management company of one of the residential developments. The panel reduced the government’s main claim by 10 per cent. Instead, it reflected the need to consider fairness when deciding how much developers should pay under section 124 of the Building Safety Act 2022.
Following the ruling, Urban Splash released a public statement describing the financial impact as significant.
Housing Secretary Angela Rayner welcomed the main findings of the ruling and said the government would continue trying to recover public money spent on building safety work. “I welcome this important decision, which is clear that those responsible for unsafe buildings need to pay their fair share to fix them,” Rayner said. However, the company also said it wanted to work with government officials to find a way forward. “Our focus is firmly on the future rather than the past,” the company said.
Most of the money will go towards repaying the government’s Building Safety Fund. Four other companies named in the original case, including external investment funds, were not ordered to pay. The panel decided that making them responsible would not be fair or reasonable. the tribunal decided not to award the full amount requested by ministers Although the government showed that the repair work was necessary. It took into account past failures by public bodies responsible for overseeing building safety. The tribunal referred to findings from the Dame Judith Hackitt Review and the Grenfell Tower Inquiry. Both highlighted serious weaknesses in building rules, government guidance and systems for testing construction products in the UK. The panel made clear that the reduction did not mean ministers were being blamed for the physical defects in the buildings. “We will continue in our efforts to recover taxpayer funds spent on remediation and our work to make people’s homes safe. “The challenges created by the Building Safety Act are not unique to Urban Splash. This is not simply about one company. It is about finding a way in which the objectives of building safety, housing delivery and regeneration can all be achieved together. ” The case could have an important effect on future building safety disputes across England. It provides a major example of how tribunals may decide how much developers must pay, whether parent companies can be held responsible and how the government can recover money spent on repairing unsafe buildings.