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Grenfell Tower Inquiry diary week 14: ‘Did it not occur to you at this point that your budget was simply too low?’

Insight16.10.202.00 PM by Lucie Heath

This week, for the first time in phase two, the inquiry heard from Kensington & Chelsea Tenant Management Organisation (KCTMO), the managing agent that oversaw the fatal refurbishment of Grenfell Tower. Lucie Heath reports

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For the first time in phase two, the inquiry heard from Kensington & Chelsea Tenant Management Organisation. @luciemheath summaries the key points from the week #UKHousing #GrenfellInquiry

What was KCTMO’s role?

KCTMO was the wholly owned company set up in 1996 to manage the Royal Borough of Kensington and Chelsea (RBKC)’s housing stock.

During Grenfell’s refurbishment, KCTMO acted as the client. It was therefore responsible for deciding the scope of the work, setting the budget and hiring contractors.

RBKC terminated its contract with KCTMO following the fire at Grenfell and KCTMO now only exists as a legal entity to represent itself at the inquiry.

Here’s what we learned from the first week of KCTMO’s evidence:

Grenfell residents branded ‘antagonists’ by KCTMO employee after requesting details of refurbishment

KCTMO admits to ‘secret’ meeting with contractor to discuss budget reductions

KCTMO director only asked architect about ‘cost’ and ‘appearance’ of ACM

KCTMO project manager admits destroying evidence relating to Grenfell refurbishment after fire

Legally required fire safety information for Grenfell ‘incomplete and insufficient’ at end of refurbishment, inquiry hears

‘This was the first project where we were given the opportunity to carry out this type of work’

Questions were raised this week about whether KCTMO had the level of skills and experience necessary to carry out a project as big and complex as Grenfell’s refurbishment.

David Gibson, who was KCTMO’s head of capital investment between 2013 and 2016, told the inquiry he believed Grenfell was the first time KCTMO was “given the opportunity to carry out this type of work on [RBKC’s] behalf”. Before Grenfell, KCTMO had only carried out “relatively minor works”, while RBKC remained responsible for “major capital works”, Mr Gibson said.

His evidence was backed up by Mark Anderson, KCTMO’s director of assets and regeneration from 2011 until early 2013. Mr Anderson said during his time at the organisation, KCTMO had been “going through a degree of change”. This partly involved trying to “do more for RBKC”.

Both witnesses raised concerns about KCTMO’s skill levels. Mr Anderson said that when he joined the TMO – which was not long before early work on Grenfell’s refurbishment began – the property services department “hadn’t been performing to the standards that either KCTMO or RBKC wanted”. He said the department had failed “over a number of years” to deliver KCTMO’s capital investment programme, which involved the maintenance of existing housing stock.

Mr Gibson said that when he joined KCTMO, he had been concerned his team’s project managers were “lacking experience”, adding that it was very difficult to find suitable people for these types of roles in the industry at the time.

David Gibson said he was concerned members of his team were ‘lacking experience’ (picture: Grenfell Inquiry)

‘There is clearly an established lack of communication from the KCTMO’

It was not just KCTMO’s lack of experience of carrying out major works that raised concerns with regards to their ability to oversee the Grenfell refurbishment – the organisation was also criticised throughout the project for failing to communicate effectively with residents.

This week, the inquiry was shown several letters sent to the organisation by the Grenfell Tower Leaseholders Association (GTLA), complaining about several issues related to “an established lack of communication from the KCTMO”. In one letter, the GTLA complained that Grenfell tenants had been told their fire doors needed to be upgraded following a fire risk assessment (FRA) 19 months before individual leaseholders were made aware of the issue.

The letter read: “The leaseholders of Grenfell Tower are not immune from fire risk. We find this matter inhuman on your behalf in relation to your lack of communication to leaseholders.”

On Monday, the inquiry heard that Paul Dunkerton, who was a project manager at KCTMO until mid-2013, took more than a month to respond to subsequent queries from the GTLA about whether it needed to replace their fire doors.

When he did reply, he told the GTLA a subsequent review of the FRA found “none of the properties at Grenfell Tower are highlighted as having ‘potentially non-compliant’ entrance doors”.

However, the first phase of the Grenfell Inquiry found that faulty fire doors contributed to the fatal spread of smoke throughout the tower on the night of the fire.

The inquiry was also shown an internal email in which Mr Dunkerton labelled two Grenfell residents “the main antagonists on the Lancaster West Estate”, which is where the Grenfell Tower was situated, after one of the residents had asked for an update on the project’s planning application.

When asked why he chose to describe the residents as “antagonists”, Mr Dunkerton said: “My choice of words wasn’t great, but they were more vocal than other residents or leaseholders in the tower.”

‘Did it not occur to you at this point… that your budget… was simply too low?’

Richard Millet QC asked Mr Gibson if by “offline meeting”, he meant “it was a secret meeting and therefore should be unrecorded” (picture: Grenfell Inquiry)

From previous weeks’ evidence, we already know that Rydon discussed cost-cutting measures with KCTMO before officially being awarded the contract for the refurbishment. This week, we further explored the procurement process from KCTMO’s perspective.

Mr Gibson told the inquiry that the organisation faced a “problem” once tender-bidding for the Grenfell refurbishment had closed: all bidders had quoted higher than the £8.4m KTCMO had allocated for the project.

At £9.2m, Rydon’s bid was much lower than the other two bidders – and £800,000 less than that estimated by the TMO’s advisers. However, KCTMO wanted to make a further £800,000 in savings.

The organisation therefore tried to find out whether it could enter into a contract with Rydon without having to commit to its bid. The legal advice it received stated that it would be a breach of EU regulations “to undertake negotiations with the tenderers prior to contract award” or “for tenderers to submit revised best and final offers”.

It added: “Your only EU-compliant options are to assess the tenders and award the contract to the tenderer who scored the highest based on your price/quality criteria… If the contract allows it, you may run value engineering exercises with your selected tenderer, but only once the contract has been entered into.”

“I think that we were actually quite pleased when we saw the Rydon tender submission figures, because it wasn’t as big of a gap as we thought there might be”

Following this advice, Mr Gibson told the inquiry KCTMO arranged an “offline” meeting with Rydon to discuss value engineering options. He said the purpose of the meeting was “for us to be comfortable and for them to be comfortable with our approach to overcome the problem”.

Richard Millet QC asked Mr Gibson if by “offline meeting”, he meant “it was a secret meeting and therefore should be unrecorded”.

Mr Gibson replied: “Yes.”

“Did it not occur to you at this point… that your budget, the £8.415m odd, was simply too low for the project that you wanted?” Mr Millet asked during further cross-examination.

“No,” replied Mr Gibson. “I think that we were actually quite pleased when we saw the Rydon tender submission figures, because it wasn’t as big of a gap as we thought there might be and we thought: ‘This is something that we can make work.’”

The inquiry was also shown minutes from a KCTMO board meeting that revealed a member of the organisation’s board had queried why Rydon’s budget was so low compared to the other bidders’, questioning whether Rydon had put in a low bid simply to win the contract. However, the board was assured Rydon submitted “a very detailed tender report which was also competitive”. It’s unclear whether the board was told about the “offline” discussions with the contractor.

‘With all due respect, it was an obvious question then: have you been involved in cladding a high-rise residential building?’

Mark Anderson insisted he properly investigated architect Studio E’s experience and interviewed its director several times (picture: Grenfell Inquiry)

The contracting of Rydon was not the only aspect of KCTMO’s approach to procurement that was queried. This week, it was also grilled on how it appointed an architect.

We already knew that KCTMO did not undertake its own procurement exercise to hire architect Studio E, instead depending on the one RBKC had undertaken for a project involving a neighbouring school and leisure centre. Mr Anderson told the inquiry RBKC gave it conflicting advice about whether it could use the same architect for Grenfell, but the council ultimately told it that doing so was within the rules.

The problem with this was it prevented KCTMO from searching for an architect with suitable experience for Grenfell. Studio E’s director has previously admitted to the inquiry that the firm wouldn’t have won the contract if it went to open tender as it had not had the requisite experience.

Under cross-examination, Mr Anderson insisted he properly investigated Studio E’s experience and interviewed its director several times. However, he admitted he never asked anyone at Studio E whether they had experience overcladding a high-rise residential building.

“Why not? It’s an obvious question, isn’t it?” asked Andrew Kinnier QC.

“It is now,” replied Mr Anderson. “I don’t know why I didn’t ask that question.”

“With all due respect, Mr Anderson, it was an obvious question then. ‘Have you been involved in cladding a high-rise residential building?’ That’s what you’re asking them to do,” said Mr Kinnier.

Mr Anderson replied: “At that stage, the type of cladding had not been determined. The questions that were being asked of Studio E… was: ‘Have you done residential refurbishment projects?’ And the response to that was that they hadn’t as a practice, but individuals involved within the practice had done that.”

Interestingly, Mr Anderson and Mr Gibson are fully qualified architects. During their evidence sessions, counsel repeatedly asked them what responsibility they had as “informed” clients to monitor the work of those they employed and question the decisions that were being made.

An example of this came when Mr Gibson was grilled on the decision to switch from zinc cladding to the cheaper aluminium composite material (ACM) panels.

“He said Mr Lawrence assured him the cladding was ‘inert’ and ‘would not burn at all’”

Mr Gibson said that despite not knowing what ACM was when it was suggested as an alternative to zinc, he only asked questions about the “cost” and “appearance” of the cladding.

“The discussions we were having were: what does it look like, is it acceptable for planners and what’s the cost?” he told Mr Millet.

He added: “Discussions weren’t any further than that because we weren’t expecting to be offered anything that might not be compliant.”

However, Mr Gibson claimed he did later raise questions around the fire performance of ACM during the construction phase after he was surprised to learn that there was a gap between the cladding and the insulation.

According to Mr Gibson, this prompted him to ask Simon Lawrence, contracts manager at Rydon, whether the cladding was safe, having recently read about the Lakanal House fire that killed six people in 2009.

He said Mr Lawrence assured him the cladding was “inert” and “would not burn at all” – Mr Lawrence had denied this when he gave evidence to the inquiry.

When asked about the incident this week, Mr Gibson remained adamant that Mr Lawrence had given him assurances, despite nobody being able to find written evidence of the meeting in which Mr Gibson claims the conversation took place. He said there was “a whole series of meetings” that took place at that time for which nobody can find the minutes.

When asked by Mr Millet whether there was anything that he thinks he should have done differently looking back on the Grenfell refurbishment, Mr Gibson replied: “With the benefit of hindsight, when I raised the query about the installation and got the assurance I received, I would have liked to have followed that up.”

Next week, the inquiry will continue to hear from KCTMO.

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Grenfell Tower Inquiry diary week 14: ‘Did it not occur to you at this point that your budget was simply too low?’

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‘Did it not occur to you at this point… that your budget… was simply too low?’

‘With all due respect, it was an obvious question then: have you been involved in cladding a high-rise residential building?’

Grenfell Tower Inquiry phase two: weekly diaries