There are probably 101 reasons why these large specialist firms have suffered catastrophic problems, with a few major ones front and centre
The last thing the cladding sector needed was the collapse of Lakesmere and its sister company McMullen Facades, which was placed into administration this week.
There are probably 101 reasons why these large specialist firms have suffered catastrophic problems. And here we point to a few major ones, including unprofitable projects, tight margins and changes in management and ownership.
We also tell the story of its client, Crossrail, scrabbling to replenish its supply chain after the specialist’s collapse caused untold knock-on effects to a long tail of worried suppliers. Tier 1 contractors and clients are acutely aware of the problems in this sector and know well how difficult it is to recruit and retain credible firms capable of delivering their large schemes.
As the ramifications of the Lakesmere saga continues to unravel, an even stronger searchlight is being turned on the cladding sector. While there are no links from Lakesmere or McMullen Facades to the Grenfell tragedy, the independent review being carried out by Dame Judith Hackitt is wide-ranging and the manufacture, design and installation of cladding will likely be examined very closely indeed. In her report, an interim version of which is due to be published shortly, Hackitt will recommend changes to the regulatory system that governs the project planning, design, construction and change management systems. The question is, how far and how deep will the review probe?
Building control inspections and planning considerations, as well as the role and responsibility of clients, contractors and manufacturers in this process will surely be examined. But in assessing the potential for risk in the construction process, will the review also consider the workflow and margin pressures of the firms that do the work? Or the undersupply of companies competent to deliver these specialist large jobs? And, given those circumstances, the pressure they are under when they do?
While there is no suggestion that these recently failed firms took short cuts or safety risks, you can only imagine the pressure the teams, management and operatives have been under to not only deliver projects but also simply to keep the business afloat. And there must be more like them out there facing the same level of stress, both in the cladding sector and beyond. After all, look at the limited capacity at the top end of the concrete or steel contracting sector. What pressures do these firms come under to deliver – and at what potential cost?
It is for the formal public inquiry to establish what went so terribly wrong at Grenfell. And the existing regulatory environment will be examined in detail. But at the same time, the cultural and operational realities of the people and companies doing specialist work should be considered too, focusing on those who install critical products onto critical projects where people need to be kept safe.
The issue for tier 1 contractors and clients is whether this highly pressured environment is acceptable at a time when their working practices are going to be in the spotlight for months to come for all the wrong reasons.