Chapter 67: Conclusions

¶67.1 Having examined in the previous chapters the parts played by the main participants in the refurbishment, we are in a position to draw certain broader conclusions about the way in which they approached and carried out the project. It is appropriate to do so, because a number of common themes can be seen running through the story which, due to their nature, we think are likely to be repeated widely across the construction industry. By drawing attention to them now, we hope that we may encourage a change in the way that the various parties to large construction projects approach their work.

Creating and understanding the contract

¶67.2 As the evidence progressed it became clear that many of those engaged on the project did not properly understand the nature and scope of the obligations they had undertaken, or, if they did, failed to pay much attention to them. The terms of Rydon's contract with the TMO were lengthy and detailed, but in substance they imposed on it an obligation to carry out the whole of the design and construction work in accordance with all relevant statutory requirements. In particular, Rydon assumed responsibility to the TMO for all the design work that had previously been done by Studio E, including drawing up the NBS Specification and the Employer's Requirements.

¶67.3 It is likely that some within Rydon were aware of the nature of the obligations it was taking on, but that does not appear to have been so in the case of those who were more directly involved in the construction work. Simon Lawrence, the contracts manager in charge of the Grenfell Tower project, appeared not to realise that Rydon was contractually responsible to the TMO for any mistakes made by Studio E in the pre-contract stage and by its various consultants and sub-contractors during the construction stage. However, at least Rydon had a formal contract to which it could resort to identify its obligations should the need arise.

¶67.4 Regrettably the same cannot be said of Harley, whose work as facade sub-contractor was carried out under a letter of intent that was clearly intended to be superseded by a formal contract but never was. The letter of intent expressly incorporated into the contract between Harley and Rydon the terms of Rydon's contract with the TMO and contained a number of detailed appendices. Harley did not bother to read them, however, and in the absence of a formal contract did not concern itself with its legal obligations but set about its work following what it regarded as the standard practice in the industry.

¶67.5 Kevin Lamb was engaged to produce design drawings on behalf of Harley, but without any formal contract of any kind.

¶67.6 An even greater degree of informality affected the arrangements under which Osborne Berry was engaged to carry out the work of installing the cladding, comprising the insulation, the cavity barriers, the supporting rails and the rainscreen panels. The terms on which it was engaged were never reduced to writing; everything was done by word of mouth. It is not clear whether Mr Osborne or Mr Berry could have described in any detail the terms on which they were working.

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¶67.7 A similar absence of formality characterised the engagement of some of the consultants. Although Studio E's services were transferred from the TMO to Rydon in about April 2014, the deed containing the terms of that engagement was not executed until February 2016, when the work had been substantially completed. Exova, which had been instructed to produce fire safety strategies for the building, continued to be retained by the TMO after the appointment of Rydon, but neither the TMO nor Rydon nor Exova itself appear to have had a clear understanding of the terms on which it was acting or of its role or responsibilities, or to whom it owed them.

¶67.8 In our view, such a casual approach to contractual relations is a recipe for disaster if events take an unexpected turn. All those involved in whatever capacity in a complex project need to understand clearly what they have agreed to do and what they are responsible for. What appears to be a widespread culture of getting on with the job without waiting for terms to be formally agreed is unprofessional and likely to result in a failure by those carrying out the work on site to understand the scope of their responsibilities. It is an area in which the principal contractor has an important part to play, because it is at the level of sub-contracting and the engaging of consultants that the problem appears to be most acute. The principal contractor is the only person who can ensure that clear, documented contractual arrangements are in place before a sub-contractor or consultant begins work.

Failure to identify responsibilities

¶67.9 The failure to put clear contract terms in place at the outset was likely to result in confusion if anything went wrong, but in this case it laid the ground for what turned out to be a more serious problem. As principal contractor, Rydon saw its role as little more than the conductor of a large and varied orchestra. It did not employ any of those whose knowledge and skills were required to design or carry out the refurbishment. They were engaged as sub-contractors and consultants as and when Rydon considered it necessary to obtain their services. Rydon saw its role as being to engage and manage a body of construction professionals, not to carry out any of the tasks itself. Insofar as it understood the broad scope of its obligations to the TMO, it considered them to have been satisfied by appointing others to perform them.

¶67.10 That had a number of unfortunate consequences. First, Rydon itself was ill-equipped to oversee the work of its sub-contractors and consultants, particularly those whose skills or expertise were of a more technical nature. Secondly, it was free to decide whether to obtain expert assistance and advice or do without it. Thus, in this case, Rydon originally agreed at the first project meeting in April 2014 that it would be desirable to instruct Exova to provide advice on fire safety, but eventually failed to make the appointment, probably because it thought it could manage without it, no doubt at a saving in cost. Thirdly, and in our view most importantly, there was a failure to establish clearly who was responsible for what, including who was responsible for ensuring that the designs were compliant with statutory requirements. That eventually resulted in the unedifying "merry-go-round of buck-passing" in which the construction professionals all pointed the finger at each other as being the person whose responsibility it was to make one or other of the critical decisions.

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¶67.11 Such is the complexity of modern construction that no principal contractor, particularly under a design and build contract, can be expected to retain in its own employment people with the full range of skills required for every project it takes on. Sub-contracting has been a feature of the construction industry for a very long time and will inevitably continue. Many sub-contractors are experts in their particular field and can afford to maintain skills and expertise in relation to a relatively narrow range of work of a kind that might be required by a principal contractor only occasionally. We do not criticise Rydon, therefore, for organising the work in a way that involved engaging sub-contractors to carry out individual elements, particularly of a specialist nature. However, if a contractor is to perform its obligations to the client in an effective and responsible way, it must ensure that within its organisation it has access to sufficient knowledge and expertise to be able to monitor the work of its sub-contractors and consultants effectively and to satisfy itself that their work complies with their obligations and with its own obligations to the client. In the present case, we do not think that Rydon did have that knowledge and expertise at its disposal. Instead, it relied blindly on its sub-contractors and consultants to exercise all relevant skill and care without being in a position to assess the quality of their work.

¶67.12 Although the model adopted by Rydon cannot in itself be criticised, it does make it essential that, as part of co-ordinating the work, the principal contractor establish clearly which person or organisation is to take responsibility for particular decisions. One of the striking features of the evidence was the number of times those involved in the refurbishment told us that a particular decision had been someone else's responsibility. Rydon, as principal contractor, should have considered the various steps involved in designing and carrying out the work and identified which person, firm or company was responsible for the decisions relating to each of them. Since it undertook an obligation to the TMO for work done before it had been appointed, that should have included a retrospective examination of the preliminary design work, including the contents of the NBS Specification and the choice of materials included in it. It should also have identified clearly who was to take responsibility for the selection of materials chosen as a result of any value engineering exercise subsequently undertaken. In this case Rydon failed to do that and as a result all those involved, including Rydon itself, appears to have assumed that someone else was, or should be, taking responsibility for critical decisions, such as the choice of insulation, rainscreen panels and other materials.

Competence

¶67.13 If the construction industry is to provide an effective service to society it is essential that those engaged in it at all levels and in whatever capacity be competent to carry out their functions and exercise all reasonable skill and care in doing so. Regrettably, the Grenfell Tower refurbishment was marked by a serious lack of competence on the part of many of those engaged on it and, in the case of some manufacturers of construction products, outright dishonesty.

¶67.14 It is not necessary to repeat here what we have said about the shortcomings of individual persons and bodies engaged in the refurbishment. It is clear from the findings we have made in the earlier chapters of this part of the report that in many respects those who were directly involved in the design and construction of the refurbishment failed in significant ways to meet the standards to be expected of competent professionals. That is particularly true of Studio E, Harley and Rydon. We were surprised at the limited knowledge of the Building Regulations, the statutory guidance and indeed industry guidance displayed by their employees, for whom a working knowledge of the regulatory regime should have been a fundamental requirement. We were also surprised by their failure to inquire into the fire performance of the materials proposed for the external wall and their lack of concern about fire safety generally. None of them appears to have thought it possible that materials that had been used on previous occasions might not in fact be suitable in the context of the refurbishment and no one asked for advice or confirmation from a fire engineer. It is astonishing that none of those to whom Exova's draft Outline Fire Safety Strategy was sent noticed that it was incomplete or thought it necessary to make sure that Exova had been given details of the build-up of the external wall.

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¶67.15 The professionals' lack of competence was also demonstrated by the way in which they communicated with each other in relation to the project. Although the TMO raised the fire safety performance of the cladding with Rydon on two occasions, it simply failed to respond and so a critical question at a key moment in the life of the project was left unanswered. The provision of information to building control was piecemeal and disorganised. Studio E on behalf of Rydon submitted old versions of drawings showing key features of the external wall that were never replaced with current versions. There was no attempt properly to document and record important design changes, not least the switch from zinc to ACM PE rainscreen panels, the introduction of Kingspan insulation when Celotex became unavailable and the use of uPVC window surrounds in place of plywood. At the end of the project the documentation provided was inaccurate, incomplete and disordered, not least the Health and Safety file required by the CDM Regulations. One result of that casual approach to record-keeping was that several of those involved in the project, including Exova and building control, were not told that ACM PE had been used for the rainscreen panels.

¶67.16 The way in which the Grenfell Tower refurbishment was handled raises serious questions for the whole of the construction industry. We were not asked to investigate the industry at large and we do not know whether the shortcomings we have identified are typical, although, judging by the evidence we heard, we think they are likely to have been widespread. It is not acceptable for large projects of this kind to be undertaken without proper contractual arrangements by parties who do not concern themselves with the regulatory regime and insist instead on carrying on in what they regard as the usual way. There is nothing wrong with a desire to "make it work", provided that is not regarded as a sufficient reason for ignoring formalities and failing to keep safety high on the agenda.

¶67.17 Incompetence in the form of ignorance of the regulatory regime affecting construction has also infected both the approach of construction professionals to building control and, in some cases, the approach of building control itself. It became apparent that most, if not all, of those involved in the project regarded building control as, in effect, an additional consultant, whose function was to give advice on the design and choice of materials and act as a safeguard to ensure compliance with the Building Regulations. That contributed to a failure on the part of Rydon, Studio E and Harley to take proper responsibility for ensuring that the design of the external wall and the choice of materials it contained complied with the Building Regulations. That was bad enough, but it was compounded by the adoption of a similar attitude on the part of RBKC's building control department, which saw its function as being to "work with" employers and contractors by enabling them to complete the work, rather than to act as the custodian and enforcer of the Building Regulations in the public interest.

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¶67.18 In our view there is a great deal to be done to raise the overall level of competence of those in the construction industry. They need to have a better knowledge and understanding of the regulatory regime and how it applies to the work they are carrying out. The disaster at Grenfell Tower has shown that it is not safe to assume without question that the way things have been done in the past is safe or satisfactory. A greater degree of scrutiny is called for, as is a better understanding of the function of building control. That needs to go hand in hand with a change in the way in which building control bodies understand their function, which is to police the regulatory regime. Their role is not to advise the applicant or building professionals how to comply with the regulatory regime and they should not be regarded by building professionals as a "safety net".

The role of the client

¶67.19 Even under a design and build contract the client has an important part to play because, among other things, it appoints the architect, who carries out the preliminary design work and in many cases continues to develop the design under a contract with the principal contractor. In most cases the choice of architect is likely to be dictated, at least in part, by experience of projects of a similar kind, unless the client is satisfied from enquiries that a particular firm has the capacity to undertake a project of the kind under consideration.

¶67.20 In the present case Studio E was chosen for reasons of a different kind and no steps were taken by the TMO to satisfy itself that the firm had the ability to tackle a project of a kind that it had not previously undertaken. That was a mistake, but not necessarily a serious one. In the event the real error lay in the failure of any of those at Studio E involved in the choice of materials for the external wall to pay proper attention to their reaction to fire.

¶67.21 The TMO consistently portrayed itself as an unsophisticated client, dependent on its professional consultants for advice. We accept that to a large degree it was, but there were some respects in which it failed to act as a prudent client. One conclusion that emerges clearly from the evidence is that the TMO was unduly concerned with reducing costs. From the outset the TMO was struggling to keep the project within budget. As the costs rose, it was dependent on the council for additional funds and from time to time they were made available, but still the TMO looked for reductions in the cost of the project rather than go back to the council for more money. The decision to appoint Studio E was driven in a large measure by a desire to keep the costs down, as evidenced by the device employed to avoid a proper procurement exercise, and costs played a part in the choice of Rydon as principal contractor, as evidenced by the "off-line" discussions that took place before it was awarded the contract. The decision to choose Reynobond PE was part of a "value engineering" exercise performed at the TMO's insistence and designed to keep costs down, but responsibility for that disastrous decision cannot be laid at the door of the TMO. It is one that must be borne by those who could be expected to know, or at any rate discover, the nature of the product being recommended.

¶67.22 Cost is always an important factor in any construction project, of course, if only because clients want the maximum result for the minimum expense and contractors are usually working on narrow margins. Realism, however, is essential and a sound understanding of the nature of the exercise being undertaken. In this case, the cost of employing an independent professional project manager would have been money well spent.

¶67.23 Any substantial construction project needs to be managed by or on behalf of the client and unless the client has the necessary experience and skill to undertake that task, it will usually appoint a professionally qualified project manager. In the present case Artelia would have been willing to act as project manager, but the TMO persuaded itself that it could perform that function itself. That was a mistake because it did not have the necessary skills or experience to undertake that task and to ensure that Rydon, and through it the other professionals involved in the refurbishment, carried out their work effectively.

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¶67.24 What we have observed in the course of the evidence has led us to the conclusion that there is not only a need to improve the education and training of those involved in the construction industry but also a change in approach on the part of all concerned which prioritises safety over speed and cost and lays much greater emphasis on an understanding of the regulatory regime and its purpose.