Persimmon sets aside £75m for cladding work

York-based house building giant Persimmon plc said on Wednesday it has made a provision of £75 million in its 2020 results to pay for its contribution “to any necessary work on 26 buildings that may be affected by the cladding issue.”

In a stock exchange statement, Persimmon said: “Following a review of past projects, Persimmon is today announcing a financial commitment to address cladding safety issues in its legacy development portfolio.

“As first and foremost a builder of traditional family homes, the group has not been a major developer of high-rise buildings.

“We believe we account for less than one percent of all high-rise developments.

“However, in the past we have built multi-storey buildings which met all the fire safety rules and regulations in place at the time, but which used cladding materials which may now be considered unsafe and require removal.

“The group believes strongly that it has a responsibility to step forward and tackle this issue head-on.

“Persimmon has therefore made a provision of £75 million in its 2020 results to pay for our contribution to any necessary work on 26 buildings that may be affected by the cladding issue.

“Persimmon has identified 9 high-rise buildings over 18 metres built by the group where, in-line with government guidance, cladding may need to be removed.

“Persimmon does not own any of these buildings and the legal responsibility and duty to ensure the building is safe rests with the current owners.

“Persimmon will provide technical support to ensure the building is made safe.

“However, if a building owner fails to step up and accept their responsibilities, Persimmon stands ready to provide the support necessary to make sure the work is done.

“For buildings below 18 metres in height the Government has recommended a risk-based approach.

“The group has identified 17 buildings below 18 metres that may be fitted with cladding requiring detailed investigation.

“Where Persimmon owns the building it will, of course, lead this work.

“Where the group no longer owns the building, it will support the owners and other parties in their efforts to ensure the buildings are safe for residents.

“Once again, should a building owner fail to meet their obligations, Persimmon stands ready to provide the support to make sure this happens.

“The group is in the process of writing to building owners and management companies (‘Factors’ in Scotland) to inform them of the findings of its review and to agree next steps.

“It is the group’s intention to progress matters as swiftly as possible, minimising uncertainty and concern for residents.”

Persimmon chairman Roger Devlin said: “The concern around now banned cladding is affecting many thousands of homeowners who live in high-rise buildings right across the country.

“At Persimmon we believe we have a clear duty to act to address this issue.

“So today we are setting aside £75 million towards any necessary cladding remediation and safety work in 26 developments we built.

“Where we still own the building we will act.

“Where we no longer own them we will work with the owners to make sure they meet their legal responsibilities and duty.

“If the owner does not step up then we will act to remove uncertainty and anxiety for residents and make the buildings safe.

“This is a decision which we believe is not only right for residents but also the right thing for us to do as one of the leading housebuilders in the UK.

“We want Persimmon to be a business with a long-term, responsible and sustainable future and hope our actions today demonstrate a clear commitment to these values.”

 

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.