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Rydon ‘pocketed’ cladding savings at Grenfell

21 July 2020

THE COMPANY’s contract manager Simon Lawrence admitted that the company ‘pocketed’ £126,000 from the switch to aluminium composite material (ACM) cladding on the Grenfell refurbishment.

The second phase began earlier this year, seeing hearings delayed due to witnesses asking for assurances that ‘anything they say will not be used in criminal prosecutions against them’. This was granted and later extendedAfter the inquiry resumed post suspension due to the COVID-19 pandemicthe first week saw a senior fire engineer state she ‘did not raise the need for any proposed cladding system to have a separate fire safety assessment’, while another was sent the cladding design report but did not view it as ‘he was not specifically asked to’. 

Earlier this month, two Exova consultants said they gave ‘no thought’ to evacuating disabled residents because the law ‘didn’t require them to’, before it was revealed architects Studio E and Royal Borough of Kensington and Chelsea (RBKC) clashed over fire safety, and another ‘had no clue that cladding was part of the plans’.

Last week, a Studio E architect said no records were kept of drawings, and that ACM cladding was the ‘cheaper option’, before Rydon contracts manager Simon Lawrence began his testimony by admitting that the company ‘overlooked’ a key fire safety document ‘regarding the fire hazards of certain cladding materials’ as well as relying on other companies to check subcontractors’ work.

Yesterday, Mr Lawrence admitted that Rydon ‘did not check’ the ‘expertise’ of the architects chosen for the project, and The Guardian has reported now on his admission that Rydon ‘secretly “pocketed”’ £126,000 on switching the cladding to ‘cheaper, more combustible’ ACM. When the company was bidding for the project in March 2014, it told RBKC that it could save £293,368 by switching from the ‘originally specified zinc’ material to ACM.

The inquiry was told that this was done despite the ACM having ‘significantly worse’ fire performance, with Kensington and Chelsea Tenant Management Organisation (KCTMO) having been trying to cut over £800,000 from the refurbishment costs, and KCTMO told Rydon that it was ‘in pole position’ to win the contract. However, Mr Lawrence admitted the actual savings, known to Rydon, would be £419,627, but ‘kept this’ from KCTMO and ‘took some of the savings for themselves’.

The news outlet noted that this was kept ‘possibly as additional profit’, and that the revelation ‘sheds new light on the fateful decision to switch cladding panels’. The switch was the ‘biggest part’ of the savings KCTMO had asked Rydon to find before awarding it with the contract, with Rydon ‘also under further pressure’ to save money because its employee Frank Smith had ‘underpriced the total works’ by £212,000, and it was looking for ways to ‘compensate’ for this, according to emails.

Inquiry counsel Richard Millett asked Mr Lawrence ‘was the plan in Rydon to keep the TMO in the dark about the real extent of the savings on the ACM panels and then pocket the difference to make up for Frank Smith’s £210,000 estimating error?’; to which Mr Lawrence – who had admitted he had known about the plan to keep the savings - replied that ‘that could be the reason for it’.

Mr Millett then asked him why it was ‘not Rydon’s responsibility to alert the TMO that Harley had advised that far greater savings could be achieved than you were letting on’, to which Mr Lawrence responded that ‘it probably went into risk or into additional profit’. A month after this decision had been made, Harley Facades’ Mark Harris was ‘preparing to discuss’ the cladding materials with Studio E, but Mr Lawrence asked him to ensure ‘anything financial stays between ourselves’.

Mr Millett asked Mr Lawrence if this was ‘because you were concerned the TMO found out you were pocketing the savings’, though Mr Lawrence disagreed, though The Guardian noted that in May 2014 that he had given KCTMO savings figures on the cladding that he admitted to the inquiry ‘materially understat[ed] the extent of the savings’.

Rydon ‘pocketed’ cladding savings at Grenfell