Why did many SME builders hesitate when the Earl of Lytton put forward his consumer protection proposal through buildingsafetyscheme.org?
On the surface, it feels uncomfortable. After the tragedy at Grenfell Tower, few would argue against stronger consumer protection. Leaseholders have endured years of uncertainty - escalating service charges, remediation delays, spiralling insurance premiums and, in some cases, displacement from their homes. The desire for a structured, pre-funded safety net is understandable.
Yet the response from smaller builders was cautious.
Within the framework of the Building Safety Act 2022, the industry is already operating in a very different environment. Extended liability periods, developer remediation contracts and new regulatory oversight have reshaped risk. Larger developers have felt that impact deeply, although they tend to have stronger balance sheets and legal infrastructure.
For SMEs, the picture looks different.
Many smaller firms were not delivering complex high-rise schemes wrapped in combustible façade systems. Their portfolios often sit in low-rise or medium-density housing. From their perspective, an industry-wide pooled scheme risked flattening those distinctions. A collective solution can sometimes feel like collective liability, regardless of who was directly involved in historic failings.
That is where the tension lies.
Cladding Matters has consistently tried to hold two realities at once. Residents need certainty. They need protection that does not depend on political cycles or fresh funding announcements. At the same time, the government’s ambition to deliver 1.5 million homes within the lifetime of this Parliament depends heavily on a functioning SME building sector.
If additional levies or mandatory contributions are layered onto already tight margins, some firms may simply withdraw from higher-risk sectors altogether. That might reduce exposure, yet it also risks shrinking supply.
There is also the question of proportionality.
Would contributions under such a scheme be risk-weighted? Would firms with no high-rise exposure contribute at the same rate as those who built tall residential blocks? Would historic work completed under different regulatory standards reopen new areas of liability? Without clear safeguards, hesitation was perhaps inevitable.
None of this means SMEs are opposed to consumer protection. Many trade precisely on reputation and local trust. Their concern, as expressed in wider industry conversations, centres on survival and fairness rather than resistance to reform.
The building safety debate has matured since 2017. It is no longer only about cladding materials. It now encompasses regulatory culture, professional competence, insurance markets and financial resilience. Any consumer protection model must navigate all of those pressures simultaneously.
It would be interesting to understand whether a more tiered approach - one aligned to risk profile and project type - might have secured broader backing. Equally, it raises the wider policy question of how we design systems that protect residents without destabilising the smaller builders government says it wants to support.
This Friday’s discussion will explore that balance.
Cladding Matters continues to provide space for these conversations - not to allocate blame, yet to examine how safety, fairness and market viability intersect. The debate around the Earl of Lytton’s proposal highlights just how difficult that intersection can be.
Join us live at 1pm on Friday.
Watch live or catch the replay on YouTube:
https://www.youtube.com/@SpillingTheProper-Tea
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