BUILDING SAFETY and Fire Minister Lord Greenhalgh said that as well as a levy on developers, the government is considering forcing cladding manufacturers to ‘contribute’ to remediation costs.
Construction News reported on the comments by Lord Greenhalgh in a House of Lords debate this week, in which he said that ‘it is worth looking at the cladding manufacturers […] because, as well as the developers, they are culpable for the situation that we find ourselves in’. He added in turn that ‘it is important that they are made to contribute to the resolution of the cladding crisis’.
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. Lord Greenhalgh also gave the House of Lords debate an update on the developer tax, stating that it ‘will include a number of the major developers historically responsible for high rises […] it is far to say that, while developers have made good solid profit in recent years, the cladding manufacturers have had healthy profit margins too’.
Read our article 'What is cladding?' here