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Government considers blocking Rydon’s housebuilding arm from Help to Buy scheme
The government is considering blocking Grenfell cladding contractor Rydon’s housebuilding arm from future participation in the Help to Buy scheme, Inside Housing can reveal.
According to sources close to government, housing secretary Michael Gove is contemplating stopping Rydon’s housebuilding arm, Rydon Homes, from accessing funding from the Help to Buy scheme due to its role in installing combustible cladding on Grenfell Tower.
Rydon Maintenance, the maintenance arm of the group, was the cladding contractor during the refurbishment of the building, which suffered a deadly fire in June 2017 that resulted in the deaths of 72 people.
The aluminium composite material (ACM) cladding added during the refurbishment was identified as the “primary cause of fire spread” on the night of the fire by the inquiry looking into the events.
Inside Housing revealed two weeks ago that as part of the government’s move to hit those involved in the Grenfell Tower refurbishment and the current building safety crisis, it is looking to ban companies from public contracts and government funding programmes, such as the Help to Buy.
It is now understood that Mr Gove is considering taking action against Rydon Homes specifically.
The housing secretary would be using powers under the Housing and Regeneration Act, which allow him to advise Homes England to stop certain firms from participating on certain government programmes, to restrict Rydon Homes from accessing Help to Buy funding.
The Help to Buy scheme was launched in 2013 under David Cameron’s government and allows first-time buyers with deposits of as low as 5% to borrow up to 20% (40% in London) of the full purchase price of a home.
Since its inception, it has been largely attributed to supporting the huge profits that many house builders have made in recent years due to the popularity of the scheme.
It is due to be withdrawn completely in April 2023, meaning Rydon Homes would only lose out for just over a year.
Rydon Homes focuses on private housing developments in the South East of England and offers Help to Buy to customers. According to its accounts, Rydon Homes posted a pre-tax profit of £700,000 last year and £9.7m in 2019.
Another arm of the group, Rydon Construction, was sold to new company Real in April.
The Grenfell Inquiry has revealed that Rydon Maintenance and the building manager, Kensington and Chelsea Tenant Management Organisation, held an “offline” meeting in March 2014 where they agreed to strip cost out of the project by switching from a safer zinc cladding to the ACM.
The inquiry also heard that Rydon understated the savings which could be made from this switch and looked to “pocket the difference” in order to boost its own profit margin.
Evidence also showed the firm referring to tenants who complained about the works as “rebel residents” and has faced accusations of bullying by those who did not want work done, which it has denied.
The work carried out on the tower by its subcontractors was described as “shockingly poor”, as fire barriers were installed upside down or missing completely.
Frustrations over the slow pace of the work led to one consultant advising KCTMO to write of Rydon “I do not think I have ever worked with a contractor operating with this level of nonchalance” in May 2016.
Rydon declined to comment. It has previously said that it would continue to assist with the inquiry and that it seemed clear from the Hackitt Review and other evidence before the inquiry that a wider review of building regulations, product testing and certification is needed.
The firm’s staff insisted they did not realise the dangers associated with using ACM and were reliant on specialist subcontractors and building control to ensure the project complied with regulations.
Today’s move is part of the government’s growing emphasis on the responsibility of developers, contractors and manufacturers as those most at blame for Grenfell and the current building safety crisis.
This has been reflected in comments by Mr Gove in recent weeks, in which he has set his stall out to protect leaseholders and taxpayers from the costs of remediation.
At a select committee meeting last month, Mr Gove said that while the government should share some responsibility for what has happened due to its lack of action after Lakanal, he believed the private sector should take the most responsibility.
He said: “You can say the sheriff, or sheriffs, might not have been on the ball, but the cowboys were behaving like cowboys in an unregulated way.”
Any move that would see private companies banned from government deals will be the largest intervention from the government regarding those involved in the Grenfell Inquiry so far.
Last month Mr Gove put pressure on the Formula One Mercedes team to pull out of an advertising contract with insulation manufacturer Kingspan after it was revealed the two companies had entered a multimillion-pound deal.
Kingspan manufactured for some of the insulation installed on Grenfell Tower during the refurbishment. The contract with Mercedes was ended by mutual consent last week.
In 2019, then-housing secretary Robert Jenrick told Rydon to stop bidding for public contracts a few days after it was initially named on the list of recommended companies for high-rise buildings.
The announcement came after bereaved members and survivors group Grenfell United criticised the decision to include them, saying it added “insult to injury”.
That same year, London mayor Sadiq Khan took the decision to sign an order to stop Rydon from bidding for works pending the outcome of the Grenfell Inquiry.
In a statement today, Grenfell United said: “We have called on government to remove Rydon from all public sector frameworks since 2019.
“We wrote a letter to Robert Jenrick in 2020, shortly after the mayor of London Sadiq Khan banned Rydon from all contracts in November 2019.
“We will continue to ensure that all companies exposed in the public inquiry for their role in the Grenfell fire are removed from government frameworks."
Inside Housing has contacted the government for comment.
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