LORD GREENHALGH told a debate on the cladding crisis, hosted by cladding campaign groups, that government loans for residents to pay for fire safety works may be the ‘only answer’ to resolving certain issues.
The government announced earlier this month a five point plan that aims to ‘provide reassurance to homeowners and confidence to the housing market’, in which Housing Secretary Robert Jenrick announced the government would fund removal of combustible cladding ‘for all leaseholders in high-rise buildings’ above 18m.
The £3.5bn in new funding means a total of £5bn has been provided, with the complete funding of all cladding for buildings 18m and above ensuring ‘funding is targeted at the highest risk buildings in line with longstanding independent expert advice and evidence’. The government cited Home Office analysis of fire and rescue service statistics, which showed that buildings between 18m and 30m ‘are four times as likely to suffer a fire with fatalities or serious casualties’ than apartment buildings ‘in general’.
Lower rise buildings between 11m and 18m will ‘gain new protection’ from a ‘generous new scheme’ that will pay for cladding removal via a ‘long-term, low interest, government-backed financing arrangement’ meaning no leaseholder will ‘ever pay more than’ £50 a month towards cladding remediation. The government claimed this would ‘provide reassurance and security’ to leaseholders, while mortgage providers ‘can be confident’ that where cladding needs to be removed, properties ‘will be worth lending against’.
A new levy and tax on developers would ‘ensure industry contributes’, with the measures to ‘boost the housing market and free up homeowners to once again buy and sell their properties’. It also said it was working with industry to ‘reduce the need’ for external wall review (EWS1) forms, thus ‘preventing leaseholders from facing delays’ and allowing for purchases and sales.
A ‘Gateway 2’ developer levy was also announced, that will be ‘targeted’ and ‘apply when developers seek permission to develop certain high-rise buildings’, alongside a new tax for the UK residential development sector that aims to raise £2bn over a decade to fund cladding remediation.
The tax aims to ‘ensure that the largest property developers make a fair contribution to the remediation programme, reflecting the benefit they will derive from restoring confidence to the UK housing market’. Legislation being brought forward this year to ‘tighten the regulation’ of building safety will, alongside review the construction products regime, help ‘prevent malpractice arising again’.
Housing developers gave the plans a ‘cautious welcome’, while Barratt became the first firm to call for a levy on developers to fund remediation. The government faced a ‘backlash’ from its own MPs and other interested parties including cladding campaigners, and was criticised by the Royal Institute of British Architects and leaseholders. Housing developers gave the plans a ‘cautious welcome’.
While Lord Greenhalgh also recently said that as well as a levy on developers, the government is considering forcing cladding manufacturers to ‘contribute’ to remediation costs, Inside Housing reported that he told the Cladding Question Time event – organised by the Manchester and Liverpool Cladiators leaseholder campaign groups – that the loans may be the ‘only answer’ to solving the cladding crisis and ‘resolving some building safety issues’.
He defended the government’s plan to offer long term loans for buildings below 18m, stating that there were ‘three levers’ the government had to deal with ‘an issue as big’ as the cladding crisis. These included grant funding, levies and taxes and a financing scheme, and he added: ‘You know some of these issues a financing scheme may well be the right answer to do that because it may be the only answer.
‘“Not having the bill upfront with 28 days to pay but paying that over many, many years at a low level is better than not having any other solution, so I think I’d make the case that financing schemes can be a way to solve the overall problem.’
He also said that the building safety fund had received 2,820 registrations, though 900 applications are ‘stalled’ because information supplied was ‘inadequate’. At the same event, Mayor of Greater Manchester Andy Burnham criticised the funding proposals as ‘complex’ and ‘too rules-based’
He added: ‘I just think the government needs to take a bit of a step back here and get back to a principles-based approach, rather than a rules-based approach. A rules-based approach with all the complexity is just going to cause more wasted efforts, people argue and all the rest of it.’
Architect and TV presenter George Clarke said it was ‘ridiculous’ that leaseholders have ‘been left waiting’ due to managing agents not submitting the correct building information to the fund, while leaseholder Hayley Tillotson discussed having had to declare herself bankrupt last year because of bills for interim fire safety measures and remediation work for her building in Leeds, which had been found to have combustible cladding.
She asked ‘exactly how bad is the government going to let this get before they step up and give us some meaningful action’, to which Lord Greenhalgh responded that there was ‘nothing I’m going to say that’s going to answer it in any way shape or form’, though he called the increased funding ‘progress’. Ms Tillotson said she would ‘rather have legal protection than a few billion quid’.
Read our article 'What is cladding?' here