Urban Splash facing £50m cladding fund claim

A major property developer has been taken to court by the government over nearly £50m of taxpayers' money it was paid to fix cladding problems.

Taxpayers "incorrectly footed the bill" for cladding replacement work on several buildings developed in Manchester by Urban Splash, a tribunal heard.

The government claimed the company "did not do the right thing" in claiming the cash.

Urban Splash said it had not had the money to pay the works and called the government's claim a "retrospective demand".

Following the death of 72 people at Grenfell Tower in 2017, there was a major push to identify and replace dangerous cladding on residential buildings, among making other fire safety improvements.

This led to the Building Safety Fund being set up in June 2020 as a means of funding some of the fixes.

It saw many residential buildings and high-rise towers undergo major works to have cladding removed and replaced, alongside fire safety measures such as "waking watches" where staff were employed around the clock to patrol buildings thought to be at risk.

The government's case is that instead of claiming taxpayers' money, Urban Splash could have "done the right thing" and chosen to fund remedial work on three high-rise towers on Dalton Street in Collyhurst - named Emmeline, Christabel and Sylvia - the Box Works in Castlefield, the Chips building in New Islington, and Moho and Burton Place on Ellesmere Street.

Trying to recover the money spent on Urban Splash buildings in Manchester, the government is using powers through a remediation contribution order, a tool brought in as part of the Building Safety Act 2022 which can require companies to pay for the cost of remediating buildings.

The government said it had "consistently called on the whole industry to do in the aftermath of Grenfell".

A six-week tribunal began at Manchester Civil Justice Centre earlier, with a panel overseen by Judge Jonathan Holbrook.

Kerry Bretherton KC, representing the government, said: "We are here because the taxpayer has had to pay some £50m to remediate these buildings.

"There is a responsibility to reclaim public monies that have had to be paid out only because Urban Splash did not do the right thing."

For Urban Splash, Nicholas Dennys KC said: "We categorically did not fail to do the right thing, we did what we could, when we could."

On the £48m the government is trying to reclaim, Mr Dennys added: "It's not as if we were resisting request for payment, what we could not do is pay for the cost of remediation for the simple reason we do not have the funds to do so."

Legal proceedings against Urban Splash started in 2024 under former Conservative MP Michael Gove, who served as Secretary of State for Levelling Up, Housing and Communities.

According to the company's website, Urban Splash has created more than 6,000 new homes and two million sq ft of workspace across 60 regeneration projects in the last three decades.

Cladding works on buildings across the country have caused major headaches for leaseholders in certain cases, with some residents facing large bills to fund works, making it difficult for them to sell their homes.

Others struggled with the major disruption and upheaval that can be caused by replacing cladding

The hearing continues.

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