Housing (Cladding Remediation) (Scotland) Bill

Miller Homes is a national housebuilder building across Scotland and England and has been building homes in Scotland since 1934. Miller builds predominantly family homes and in 2023 built c4000 homes in the UK with l c850 of these being in Scotland. We have two offices located in Scotland; Glasgow and Edinburgh, the latter doubling as our Headquarters.
As a signatory to the Developer Commitment Letter as a “Wave 1 Developer” within the terms of the Scottish Safer Buildings Accord dated 30 May 2023, Miller has demonstrated its commitment to working collaboratively in addressing fire safety issues.
Miller has previously written to the Minister for Housing to express its concerns in connection with (i) the procurement of the Single Building Assessments (“SBAs”), (ii) the general progress of the cladding remediation works programme in Scotland, and (iii) the lack of opportunity given to the housebuilding sector to provide input in connection with the Bill and the wider cladding remediation process. Our concerns are informed by our experiences at a live remediation project in Scotland, which was intended by Scottish Ministers to be a ‘pilot’ project. However, the experiences on that project have not been learned or have been taken out of context Resulting in some items within the bill which will have far reaching consequences for Scottish Government, Developers and residents of high-rise buildings.
We have significant concerns regarding unintended consequences and the efficacy of the approach being proposed by the Scottish Ministers as reflected in the Bill; its impact on ordinary householders; its effect on the public purse; the lack of due process across significant parts of the scheme; and the likely damage to the wider housing sector that is charged with delivering badly needed social and affordable housing and associated infrastructure for Scotland.
Our concerns are specific to the scheme proposed by Scottish Ministers, not to the scheme that has been successfully progressed in England and Wales (E&W).

No. We do not consider the Bill will deliver quick and cost-effective remediation of potentially flammable cladding systems. We also have concerns about the scope of powers outlined and the funding available particularly at local authority level -to deliver provisions outlined in the Bill
Our experience with the pilot project in Scotland has been one of frustration and delay, due to issues and delays with the Scottish Ministers’ SBA process and the introduction of ‘betterment’ through Scottish Ministers’ retrospective application of current standards (which is not replicated in the successful scheme in E&W). We have previously highlighted these points to Scottish Ministers in correspondence. The Bill does not resolve them. Also, there is a lack of detail and due process in respect of key aspects. While secondary legislation would allow for further scrutiny and reflection on the detail of key elements of the scheme, fundamental principles of, for example, due process, legal liability and the codification of decisions should be set out in the primary legislation. For example, it is notable that the way the standards of the proposed lynchpin SBA will be developed and implemented is entirely missing from the Bill (clause 25 (c)(i).
The Bill has been published significantly later than the relevant legislation enacted to deliver cladding remedial works in E&W. The scheme in E&W has progressed successfully and in a relatively collaborative and balanced manner as between industry and government and cladding remedial works have been successfully under way for some time. However, the Bill ignores almost all of the processes and procedures that are already delivering successful remediation projects in E&W – for example, utilisation of the PAS9980 code of practice for fire risk assessments; the acknowledgement of a “tolerable” level of fire safety risk; and the scope of the ESW1 document (relevant for mortgage lenders etc) being limited to the fire risk of external cladding.
It would appear to us to be more expedient and cost effective to utilise the work already done by the fire engineering, housebuilding and similar sectors in E&W but develop/tailor this where necessary for use in Scotland. This would have the twin benefits of using a scheme which is proven to work and to deliver cladding remediation in an effective manner, whilst positively contributing to a housebuilding sector which is vital to the delivery of social and affordable housing in Scotland. We consider the Bill as currently framed is detrimental to both these aspects. We would be happy to provide the Committee with evidence of our experience in E&W comparative to the pilot scheme in Scotland.
The following provisions and approaches of the Bill, in particular, militate against quick and cost-effective remediation:
Single Building Assessments (“SBAs”)
Contrary to the approach in E&W, we understand the Scottish Government’s aspiration is for the SBA to form an all-encompassing assessment and record of the fire safety risk within an affected property. However, our experience in seeking a final form SBA on our Scottish Government pilot project (which has still to be provided despite the process being commenced by the Scottish Government in late 2021) shows that this approach slows down the programme for remedial works required to potentially flammable cladding systems. Various iterations of the draft SBA requiring different mitigation measures has slowed down the process of remediation.
The current SBA approach will result, in the costs of procuring delivery of works being significantly greater in Scotland than would be the case with equivalent properties in E&W despite delivery of acceptable levels of risk to fire safety. We are undertaking an exercise with external costs consultants to determine the magnitude of the cost difference and we will provide this information to the committee. Given the number of orphaned buildings in Scotland, this current approach will have a significant and adverse effect on public funds, as these works must be pursued by Scottish Ministers, and this at a time when public funds are scarce.
Our experience to date is that the SBA process has been slow and inflexible and inclined to produce excessive findings and requirements. Our experience on the pilot project has been that fire engineers have differed in their approach to assessing fire risk and the scope and methodology of remedial works, yet the Bill provides no facility to have Scottish Ministers’ SBAs reviewed, nor any indication at all of applicable standards and the method through which those standards will be determined, approved and established (clause 25 (c)). We would have expected that the Bill would follow on the back of technical consensus by key stakeholders as to the scope, standards and processes applicable to the SBA. This consensus has not been properly explored by Scottish Ministers far less reached. The absence of technical consensus will inevitably give rise to uncertainty and the risk of inadequate Bill drafting, ensuring remediation is neither quick nor cost effective and is in danger of not actually addressing the issues.
The Bill contains no or insufficient detail inter alia on the following key aspects of the SBA:
• Application – the Bill states the SBA will apply to a building that “stands 11 metres or more above the ground”. It should be clear that the 11 metres is the floor level of the top habitable apartment per E&W. We would also question the scope that exists within the Bill for the Scottish Ministers to extend affected properties to include buildings below 11m, such extension being beyond the current risk position within fire safety tolerance. This is a wide ranging power carrying with it the risk of unintended consequences – such a power should require to be exercised via additional primary legislation rather than regulations.
• Scope – the Bill envisages that the SBA will identify work that is “needed to eliminate or mitigate a risk to human life that is (directly or indirectly) created or exacerbated by the building’s external wall cladding system”.
o Where the external wall cladding system is low risk, the fact that the Bill would still apply if “indirectly” other factors (e.g. poor ongoing maintenance of other parts of the property) are exacerbated by the external wall cladding system is a significant overreach. How will this be assessed?
o We think the use of the terms 'eliminate' and 'mitigate' in clause 25((b)(ii) without further explanation is problematic - is it really the intention of SBAs to eliminate any risk to human life? It is not possible to eliminate all risk in relation to a building - it should be to an acceptable (or tolerable ) level. It is very unclear that this would be achievable at all under these statutory provisions. The phrase 'eliminate or mitigate' appears throughout the Bill in clauses 1 ((2), (3), 6 (1), 7 (1)(a), 21 (6), and 25 (b)'. This standard of elimination should be justified and explained in detail; it is notable that elimination is not a requirement of e.g. the Health and Safety at Work Act 1974.
• Who can procure the carrying out of an SBA – the explanatory notes to the Bill suggest that these can be undertaken by developers, but this is not reflected in the Bill, which only provides for SBAs and remedial works being performed, and associated powers being exercised, by Scottish Ministers (see for example clause 3).
• Who can perform an SBA – the Bill states that only those authorised by Scottish Ministers can undertake an SBA (clause 25 (c)(ii)). While we welcome the Bill requiring specific authorisation, no further detail is provided. Will developers, owners and occupiers be able to make representations as to the appropriateness of such authorisations in these circumstances? We consider, for example, that if SBAs are to be carried out by developers, they should be free to choose a reputable fire engineer to perform these in accordance with the specified standards, whether authorised by Scottish Ministers or not. We would be happy to share our thinking on these issues further with the Committee.
• Standards - what are the standards under which the SBA must be undertaken? Will the PAS9980 code of practice for fire risk assessments be utilised? The Bill indicates the standards are to be specified by Scottish Ministers (clause 25 (c)) but fails to specify the way in which these standards will be determined and established; what is meant by “specified” in this context?. We understand that delays mean these standards will not, in any event, be available until April 2024 at the earliest. This will further delay the progress of remedial works. It is clear from experience that to use consistent standards with E&W will bring much needed clarity for fire engineers and others who are involved in the assessment of buildings.
• What is the process for making representations or raising concerns with the conclusions of an SBA procured by the Scottish Ministers – we have had experience in our pilot, of errors being included within an SBA prepared for the Scottish Government. These errors were identified by other, independent fire engineers. Given the SBA will govern the scope of the required works to affected properties, the obligations imposed on the developer (and potentially other stakeholders) and are the gateway for entry on the Register, there requires to be suitable due process in agreeing or determining a final SBA. At present the proposal from Scottish Government (although not reflected yet in the Bill) places peer review of the Scottish Government’s commissioned SBAs with government officials. That does not accord with appropriate due process or independent audit principles.
• Legal Reliance - where Scottish Ministers have procured an SBA, what legal reliance is available to the developer who is obliged to implement works specified in such SBA i.e. if the SBA recommendations are complied with by the developer but the SBA recommendations turn out to be deficient or incorrect, where does liability sit? What legal reliance is available to the owner, occupier or insurer who places reliance on the register based on a defective SBA? If there are non-cladding related fire risks in respect of a property how will there be any assurance that a remediated property can be entered on the register or indeed remain on that Register?
• Other Information in the register – clause 1(5) provides an unrestricted right to Scottish Ministers to include other (unspecified) information on the register. We consider that only information directly related to the matters in clause 1(3)(a)(i) to (iii) should be included in the register and developers, owners and occupiers should be given the express right to have a register entry reviewed and revised.
Given that the SBA is the primary document within the scheme from which parties’ obligations flow, we are concerned that the same programme delays that we have experienced with the SBA process on our pilot project will manifest in the wider remedial works programme in Scotland, prolonging distress and inconvenience for individual owners and occupiers. Any delay will also likely bring with it additional costs, for example, increased consultants fees, costs of waking watches, greater management time.
Non-Cladding Fire Risks - we would also point out that it is not just cladding that poses a fire risk to the properties in question. It is possible that the required cladding remedial works are completed yet the property still remains at fire risk. The question of non-cladding related fire safety risks and the ongoing maintenance and management of fire risk is not sufficiently addressed in the Bill.

To avoid some of the unintended consequences outlines, we believe there are four areas of amendments that need to made to the Bill:

E&W scheme – we believe valuable lessons can be learned from the E&W scheme. We would be happy to provide evidence of our experience of the E&W scheme for the Committee to consider.

Completion of Works - there is no detail as to the process for sign off on “completion” of the remedial works required by the SBA, save that the Scottish Ministers (in terms of clause 1(3)(iii)) are to be satisfied that the work has been completed. How is such sign off being resourced and paid for by the Scottish Ministers – will there be sufficient resources for the Scottish Ministers to have an active role in relation to each set of remedial works across the affected properties? Also, there is a lack of due process here. A developer, owner or occupier should have the opportunity to have the Scottish Minister’s dissatisfaction reviewed, particularly if their own independent professionals consider completion has been achieved. In E&W a further report must be carried out be an independent fire engineer to confirm that the fire safety risk is now acceptable – we are not clear why Scottish Ministers need to be involved. There is also the building control process to be carried out as a further check.
Standards for Remediation - there is no detail within the Bill as to the approach being taken in connection with building warrant compliance in respect of required remedial works. The required standards for remediation has implications for any statutory approvals process – any ‘betterment' aspects would, as well as being unreasonable, cause further delay and additional cost to the statutory approvals process due to enhanced design and specifications having to be developed.
The Scottish Safer Buildings Accord dated 30 May 2023 to which we are a party suggests that all warrantable works (including building remediation) will be required to meet current standards for Sections 1-3 of the Scottish Regulations. This is likely to involve ‘betterment’, particularly in respect of Section 2 which mandates a Euroclass A2 minimum standard for remediation, whereas in E&W a B1 standard is accepted.
The differing approach in Scotland regarding remediation standards is adding further delay to the remedial works programme. The process lacks clarity. We do not understand why there should be an inconsistent position as between Scotland, and E&W, particularly if adoption of a nationally acceptable standard would expedite the completion of the remedial works, which would fundamentally be to the advantage of all interested parties.
It is not a balanced approach to expect commercial developers to fund and deliver upgrades to properties in Scotland to accord with standards that did not apply when developments were completed. A more realistic approach would be to accept the PAS tolerable standards approach which is accepted by key stakeholders as being reasonable and appropriate for fire safety and safe occupation purposes.
A “betterment” approach will cause a significant additional impact on the public purse where the Scottish Ministers require to perform and fund the works. Also, significant additional resource would likely be required at local authority level to manage this process at a time where local authorities are stating they are having to cut services due to insufficient budgets – we note that earlier this month in a pre-budget warning COSLA has said that Councils in Scotland are suffering the same funding crises as seen in E&W. How would the Scottish Government intend to fund this?
Expedited Statutory Approvals - the building warrant process is an area where the Scottish Government can provide meaningful assistance in driving the programme for delivery of remedial works, by expediting engagement and approvals from local authorities. We would ask that the Scottish Ministers consider whether a mandated approach could apply across all local authorities to ensure consistency and whether an expedited approvals process could be part of the legislation.

No. Contrary to the position in E&W, the Bill assumes a building is at risk until and unless it is demonstrated not to be, contrary to the position in E&W. The Bill proposes that a property is not entered onto the Register until the later of (a) completion of a “clean” SBA requiring no remedial works and (b) completion of remedial works specified in the SBA. We consider this will only exacerbate the current issues regarding mortgaging/re-mortgaging, buying, selling and insuring properties, principally to the detriment of individual owners and occupiers.

The Bill provides no interim measures to assist owners/occupiers and there are no time limits for completion of the SBA process. On the basis that Scottish Government has advised it considers this to be a 10 year programme, homeowners and occupiers will almost certainly remain in limbo for a further significant period of time, unable to sell or re-mortgage their property.
To resolve these issues the following options could be considered:

• a register of all properties on day one, with the register being updated to show the status of buildings (i.e. whether an SBA has been undertaken; whether necessary remedial works have been undertaken). The Registers created in E&W are intended to create a live picture reflective of the current risk profile of a property – this is reflective of the proportionate response taken in E&W that acknowledges the reality that there may be a “tolerable” fire risk.

• a prioritisation system or the creation of categories of risk allocation, such that on completion of high risk/urgent remedial works a property can be entered on the Register (this will naturally tie into how SBAs categorise works and activities).

Obligations on the Scottish Ministers to maintain the Register - there requires to be a positive obligation on the Scottish Ministers (with timescales) to procure entry of buildings onto the Register and remedies available to developers and homeowners in respect of losses suffered from a failure to do so.

If the intention is for Developers to procure SBAs, there also needs to be a process for Developers to apply for properties to be added to the Register combined with a positive obligation on the Scottish Ministers to arrange for such registration.

Similarly, there should be a process for relevant stakeholders to be able to require the Scottish Ministers to correct any inaccurate entries on the Register and, where appropriate, to challenge amendments that Scottish Ministers seek to make to register entries (clause1(4)).

Obligations on the Scottish Ministers to Procure Works - for orphan buildings there is no absolute obligation on the Scottish Ministers to carry out remedial works. Our concern is that this could lead to a potential two tier system between properties that private developers are obliged to remediate and those that Scottish Ministers may choose to remediate – with the consequential effect on the many individual homeowners within such buildings.

Uncertainty of SBA Requirements - our comments on the SBA are also relevant here as the SBA is key to the Register – the practical effect of uncertainty and delay in the SBA process will result in delay in properties being added to the Register, leading to the unintended consequence of homeowners being unable to remortgage or sell.

Mandated Fire Safety Assessments - unlike the position in E&W, in Scotland there are no mandated fire safety assessments, which leaves a gap regarding internal fire risks. The Bill should address this gap which will assist in sharing responsibility for ongoing internal fire risks, maintenance and management between those parties responsible – this is a concern not only for developers but should also be a concern for the Scottish Ministers. The absence of such provision and allocation of risks attributable to homeowners, factors for maintenance and management post completion of the building works would result in such risks having to be managed by Scottish Ministers for all orphan buildings, further increasing the costs to be borne by the public purse.

Owner and Occupier Responsibilities - in addition to mandated fire safety assessments, the Bill should specify who has responsibility for managing and resolving issues that are not within the control of the original developer and the process for managing and resolving such issues. For example, we have experience of key findings/recommendations within the Scottish Government’s SBA for the pilot project mandating that:

• a flue within a commercial unit forming part of the development be cleaned and maintained;
• EV charging points installed by third parties be moved from their installed location;
• obstacles in hallways and corridors created by residents’ equipment and belongings, be removed.

Engagement and Buy-In from Lenders and Insurers – central to challenges around re-mortgaging, buying, selling, and insuring properties with potentially unsafe cladding is the buy-in of lenders and insurers. We believe that adopting approaches that are consistent with those already being successfully adopted (and approved by these parties) in E&W will assist in overcoming such challenges, in the interests of achieving the cost-effective and prompt delivery of cladding remediation in the interests of individual owners and occupiers.

If the intention is for Developers to be able to procure SBAs directly, then the associated authority for carrying out the assessment and work need to apply – the draft Bill needs to be clearer in this regard and there should be a requirement in the Bill for the Scottish Ministers to provide assistance to Developers where they face difficulties in exercising such rights.

Imposing of Urgent Remediation Work and Decant - we consider the extensive powers given to the Scottish Ministers to undertake urgent remediation work under the Bill (which the Bill will in some cases permit without notice of such work being given to the owners and occupiers) are overreaching. The rights granted allowing the Scottish Ministers to require the decant of occupiers are onerous and disproportionate – with such measures unlikely to be popular with residents. There must be a clear framework within the Bill so that the powers of decant are only instigated in the most high risk of circumstances with full rights of appeal. Government interference with fundamental property rights of occupiers should require consensus among at least 3 independent fire safety consultants that such a decant was necessary. Any such decants will only exacerbate the existing housing crisis.

Criminal Sanctions – similarly, we consider that a number of the criminal sanctions contained within the Bill are excessive e.g. section 14 of the Bill which creates an offence for failing to provide assistance or information.

We note that a discretionary power is given to the Scottish Ministers to make regulations for inter alia appeals in relation to the Responsible Developers Scheme (clauses 22, 23, 28); we have commented on these provisions below. As these are discretionary powers no mechanism or timescales have been proposed in the Bill.

No, we do not consider this scheme will expedite the process of remediating buildings with potentially unsafe cladding. The pilot project that Miller Homes has undertaken with the Scottish Government, following the same approach as this scheme, has been slow, inefficient, disproportionate and frustrating, even accounting for the necessary delays built into any pilot scheme.
We have already expressed significant concerns regarding the programme and cost implications as well as a lack of due process in respect of key elements of the scheme directly to the Scottish Ministers, per correspondence dated 28 June 2023 and 20 October 2023.
There is a lack of clarity around some of the key terminology and tests within the draft Bill – all of which create uncertainty in a legal framework for vital remedial works. For example:
• “work required to eliminate or mitigate a risk to human life” (section 1(2)) – this is a departure from the previous terminology used in reference to SBAs which referred to “mitigation or remediation that is required to move risks …from high risk to low risk.” As we have explained above the phrase ‘eliminate or mitigate’ is peppered throughout the Bill – in clauses 1 ((2), (3), 6 (1), 7 (1)(a), 21 (6), and 25 (b). We think the reference to “eliminate” introduces a test and/or legal standard that is incapable of being achieved or assessed with any certainty; as such it is highly problematic to include this in the Bill, even as an alternative to mitigation. It is notable that the obligations under, for example the Health and Safety at Work Act 1974 do not require the elimination of all risk; instead requiring controls that are “reasonably practicable”
See our comments above regarding:

• the delays and lack of clarity as to the proposed SBA process;
• the lack of clarity as to the standards to which remedial works are to be undertaken.

We do not think that such a prohibition will be proportionate in all cases and instead that there is a significant risk that such a sanction will have unintended consequences. For example:

• SMEs – given the extensive works obligations placed on developers, it is likely that some SME’s will be unable to meet the costs. If an SME fails to meet its obligations due to the costs and obligations imposed on them being too high in the case of a particular development, it does not seem fair or proportionate or supportive of SME’s in Scotland to halt their live development projects or prohibit any future projects. There should be a distinction made between developers who ‘can’t’ and those who ‘won’t’;

• Supply Chain – imposing such a sanction will not only have an impact on the developers on whom the sanction is aimed, but will affect their supply chain of contractors, sub-contractors, consultants, and suppliers in Scotland. In October 2023 CITB reported that 2024 is predicted to be tough for the construction sector and there is just a 1% increase in total work expected between 2023 and 2027. In a sector that has been significantly affected by shortage of labour, price increases in materials, the mothballing or delay of potential projects is likely to result in insolvency outcomes;

• Impact on Delivery of New Housing – as well as the impact that such sanctions would have on the private housebuilding sector and resulting impact on the Scottish economy, private housebuilders have a leading role in the delivery of affordable homes in Scotland, Imposing such sanctions on developers, will result in a direct downward correlation on the delivery of social and affordable homes in Scotland, which would be a significant hindrance on the Scottish Ministers’ ability to achieve its target of building 110,000 new affordable homes by 2032.

Right of Appeal – of particular concern is that the Bill (clause 24(8)) provides there “may” be a right for appeal against the Scottish Ministers’ decision to include a person on a prohibited developers list. It would be appropriate for the Bill to require a full merits based right of appeal, given the potentially significant consequences of being included on the prohibited developers list. The same points apply to membership and loss of membership of the responsible developers scheme (clauses22(3) and 23(3)). We note that the Bill does require that Regulations on loss of membership “must enable a person who has become a member...to choose to stop being a member,”; rights of appeal require a similar mandate.

Responsibility for Ongoing Management and Maintenance – the legislation needs to be clear as to who has responsibility for managing and resolving issues that are not within the control of the original developer and how it proposes these are addressed, so that there is certainty that severe sanctions such as this prohibition on development cannot apply due to a failure to implement obligations that are outwith the control of developers.
We note that there are no provisions within the draft Bill for a right of recourse for developers against contractors and consultants who were involved in the original construction works where there has been negligence or poor workmanship. This situation exists in E&W and forms part of the liability underwriting for PI insurance. Without such right of recourse Scottish developers are being unfairly disadvantaged We think this should be addressed in legislation.

While we accept that reserving the detailed operation of some key parts of the scheme to secondary legislation should afford an opportunity for additional consultation and focused ongoing technical work, there is nonetheless an absence of important detail and legal principle(s) in the Bill, primarily in relation to the SBA, Cladding Assurance Register, legal liability, and the Responsible Developers Scheme. We have explained throughout this response where the main (though by no means exhaustive) gaps and problem areas are in the current drafting of the Bill, and we have provided the Committee with reflections from our experience of both the pilot project in Scotland and the E&W scheme. In our view, there is a real risk that the framework in the Bill does not meet the requirements of the SBA (Register and Scheme) once finalised, and that the Bill (if enacted) may have unintended consequences as a result.

It is of vital importance that secondary legislation will be taken through the affirmative process and that there will be further detailed consultations on these provisions such that relevant stakeholders can make representations that will be properly considered and taken account of. Clarity and stakeholder engagement and buy-in is key to the efficient and cost-effective delivery of cladding remediation in Scotland. These are presently absent.

Our view is that this is a question for assessment by fire safety engineers because it depends on the evacuation strategy for the relevant buildings.