The main contractor on the Grenfell Tower refurbishment secretly “pocketed” £126,000 while switching the cladding to cheaper, more combustible materials, the inquiry into the deadly fire at the building has heard. Rydon was bidding for the project in March 2014 when it told the landlord of the council block that it could save £293,368 by switching from the originally specified zinc cladding to plastic-filled aluminium panels, which the inquiry has heard had “significantly worse” fire performance. At the time, the Kensington and Chelsea Tenants’ Management Organisation (KCTMO) was trying to cut more than £800,000 from the costs and had told Rydon it was “in pole position” to win the contract. Rydon knew that the actual saving from the switch would be £419,627, but kept this from the client and “took some of the savings for themselves”, possibly as additional profit, Simon Lawrence, Rydon’s contract manager, admitted to the inquiry. The revelation sheds new light on the fateful decision to switch cladding panels. The inquiry has already found that panels eventually installed were the principal cause of the rapid spread of the fire on 14 June 2017 that killed 72 people. Lawrence also admitted he did not investigate the fire performance of the ACM panels and said he did not know they performed significantly worse than zinc in a fire. The public inquiry into the Grenfell disaster restarted at the beginning of this month and is taking evidence under strict social distancing measures, with the bereaved and survivors prohibited from being in the inquiry room in person. It previously heard from architects and fire engineers who were employed before Rydon were brought onboard but then sidelined. Earlier on Monday the inquiry was told that Rydon promised five times to appoint fire safety advisers but failed to do so. Instead, it relied on the building control department at Royal Borough of Kensington and Chelsea council, which owned the block, to advise on whether there were any safety problems. Lawrence admitted Rydon did not tell the client or the architect it was not hiring a fire expert despite having said it would do so in meetings in April, June, July, September and October 2014 as works were getting under way. The absence of a fire engineer on the team meant the cladding was chosen without consulting a specialist fire safety consultant, Lawrence confirmed. The switch to the aluminium composite cladding panels, which since the fire have been banned on tall buildings, was the biggest part of more than £800,000 of savings that KCTMO had asked Rydon to try to find in March 2014 before awarding it the contract. Rydon was also under further pressure to save money on the job because one of its employees, Frank Smith, had underpriced the total works by £212,000. Rydon was looking for ways to “compensate” for the mistake, internal company emails showed. Richard Millett QC, counsel to the inquiry, asked 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?” Lawrence, who admitted he had known about the plan to take the savings, replied: “That could be the reason for it.” Millett asked: “Why was it not Rydon’s responsibility to alert the TMO that Harley had advised that far greater savings could be achieved than you were letting on?” Lawrence said: “It probably went into risk or into additional profit.” The following month, when Mark Harris at Harley Facades, Rydon’s cladding subcontractor, was preparing to discuss the cladding materials with the architects, Studio E, Lawrence asked him to ensure “anything financial stays between ourselves”. Millett asked Lawrence: “Was it because you were concerned the TMO found out you were pocketing the savings?” “No,” Lawrence replied. Again in May, Lawrence gave the TMO savings figures on the cladding which he admitted to the inquiry “materially understating the extent of the savings”. Earlier, Lawrence said Rydon did not normally employ specialist fire consultants and that the company felt “comfortable with the risk” of overcladding Grenfell Tower as it had done it before on social housing blocks. Plus, he said, it was using “what we believed to be a competent specialist sub-contractor”. He said previous projects included several towers on the Chalcots estate in Swiss Cottage and Ferrier Point in Newham, both in London. Rydon had used Grenfell-style combustible aluminium composite material panels on those homes too. The materials were deemed to be in breach of building regulations after the fire and had to be stripped off hundreds of buildings including Chalcots and Ferrier. The inquiry heard that when Chris Holt, Rydon’s site manager, asked Lawrence about the need to address fire safety, he was reassured that it was in hand. In a written statement to the inquiry, Holt said: “I was aware that as the refurbishment was to a residential block of flats, one of the main risk factors would be fire safety. When I started on the project I spoke to Simon Lawrence and asked whether I was required to consider aspects of fire safety in my role. Simon informed me that it was not part of my role and had been dealt with.” Lawrence said he did not recall this conversation. The inquiry continues.