Urban Splash fights government £48m building safety fund claim

Urban Splash has been taken to court by the government in an effort to recover almost £50m in public money spent on building safety works in Manchester.

The Ministry of Housing, Communities and Local Government (MHCLG) is claiming that the developer wrongly used money from the government’s Building Safety Fund to remediate seven buildings found to contain fire risks.

The Department is attempting to claim back £23m spent on Burton Place, £15m on the Moho Building, £3.1m on the Chips Building, £2m on Emmeline House, £1.8m on Box Works, £1.5m on the Christabel Building and £589,000 on Sylvia House.

The Building Safety Fund was set up in June 2020 to pay for fire safety remediation works on buildings found to contain defects in the aftermath of the Grenfell Tower fire, which killed 72 people in June 2017.

The fund was intended to help leaseholders and was targeted at developers or building owners which were unable to afford the cost of remediation works.

But in court documents, lawyers acting on behalf of MHCLG said Urban Splash was “responsible for the defects” paid for through the government scheme.

“The First Respondent could have chosen to do the right thing and remediate the buildings itself, as the government consistently called on the whole industry to do in the aftermath of Grenfell. It did not,” the department’s lawyers claim.

A spokesperson for Urban Splash said the developer “strongly disputes MHCLG’s claims”. 

Lawyers acting for Urban Splash described the government’s case as “retrospectively enacted” and argue there is “no compelling public interest” in the state recovering the funds.

“The Urban Splash Group has provided considerable public benefit as a result of its work,” lawyers for the developer said. 

“It now finds itself mired in long-running and protracted litigation arising from an attempt to retrospectively impose liability on parties which had no involvement in the developments.”

A spokesperson for Urban Splash said: “We acted responsibly to create and regenerate buildings within the Building Regulations regime set by previous governments.  

“Following the Grenfell tragedy, the buildings now have improved safety in accordance with the current Building Regulations regime without the costs falling on leaseholders. 

“The government’s approach to recovering its costs of implementing those improvements, in this case, is neither fair nor proportionate and if successful, will lead to SME developers funding much higher remediation costs than major developers after taxpayer money has been wasted through uncontrolled spending.  

“Despite our best efforts, it has not proved possible to resolve this matter outside of the formal legal process.” 

A six week tribunal started at the Manchester Civil Justice Centre on Monday 27 April and will continue next week from Tuesday 5 May, and then the following week from Monday 11 May. These hearings will be followed after a gap by a further three weeks of hearings.

The case is one of the first uses by MHCLG of new powers under Section 124 of the Building Safety Act 2022, which enable the government to recoup public money spent on fixing buildings with fire safety issues. Legal proceedings began under the previous communities secretary Michael Gove in 2024. 

Action is also being taken against Hollybrook Homes and Yiannis Holdings Ltd over money spent on buildings “outside the developer self-remediation contract,” MHCLG said.

Combined, these buildings include more than 1,000 households.