Counting the cost of the Shepherds Court fire

I have been urging Hammersmith and Fulham Council to install sprinklers in all its housing blocks.

One argument concerns cost. But then we need to consider the financial – as well as human – cost of fires that could be prevented had sprinklers been installed. I asked for the costs relating to the Shepherds Court fire and had the following response

The Acting Head of Financial Investment & Strategy for the Council’s Department says:

“You have asked us to advise on the estimate for the total costs to the Council resulting from the Shepherds Court fire – including loss of rent, cost of emergency accommodation, rebuilding costs, and compensation.

“As at 31st July 2017, the council has incurred:

Capital Works:

Capital works to the value of £630k have been carried out to date and there is an estimated £970k more work to do.

These costs include some works which are over and above the fire damage reinstatement works, like improving fire safety features. The exact proportion of cost attributable to such works has not been determined at this stage. Such enhancement costs cannot be expected to be recovered from the insurers as they are not being incurred because of the fire. 

The element of spend which relates to re-instatement works can be recovered form insurers (subject to the insurers loss adjusters being satisfied with what the council is claiming and the supporting evidence) but the council will need to pay a £100k excess of which £1k will be charged to the Housing Revenue Account and £99k will be charged to the corporate insurance fund.

Revenue costs

The council has also incurred other costs and lost income of £224k of which we expect £206k to be recoverable from insurers, resulting in a net cost/loss of income to the council of £18k.

As some tenants are still in homes that could otherwise be let out to new tenants the loss of income is expected to increase, however all of this is recoverable from insurance subject to the loss adjusters being satisfied.

Therefore, to date, the total estimated net cost to the Housing Revenue Account and Council’s Insurance fund resulting from the damage caused by the Shepherds Court fire is £118k.”

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