AFTER THE government announced the £3.5bn in extra funding, it has faced a ‘backlash’ from its own MPs and other interested parties including cladding campaigners.
Housing Secretary Robert Jenrick announced yesterday that the government would fund removal of combustible cladding ‘for all leaseholders in high-rise buildings’ above 18m, while 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’.
The £3.5bn in new funding means a total of £5bn has been provided by the government, 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’.
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’.
On the EWS1 situation, the government said it was ‘aware’ that securing ‘appropriate’ professional indemnity insurance for the work was a ‘major barrier’, and so it said it was ‘committing’ to work towards a ‘targeted, state-backed’ indemnity scheme for professionals unable to obtain said insurance for the EWS1 surveys. It would ‘work closely’ with industry to design such a scheme, with more details to come.
However, The Guardian reported (here and here) on the backlash the government has received over the plans, noting that the funding ‘will leave half a million people facing financial difficulties’ and with Prime Minister Boris Johnson criticised by his own MPs after the revelation that homeowners in blocks below 18m ‘would be left out’ and offered loans instead which ‘risked pushing them into negative equity’.
End Our Cladding Scandal’s Paul Afshar, a leaseholder affected by combustible cladding, commented ‘This feels like a betrayal. We are talking about hundreds of thousands, if not millions of people living in lower-rise flats who have the same problem today that they woke up with yesterday.’
At government level, the ‘backlash’ from Conservative backbenchers included criticism from MP Stephen McPartland, who said he had listened to the announcement ‘with my head in my hands’ and saw it as ‘smoke and mirrors, to look as though we’ve tried to fix the problem, but it’s not going to do it’. He also noted that the funding would fail to cover fire safety costs beyond cladding, and called the loan scheme ‘unworkable’.
He added that ‘that £50 a month would take somebody 83 years to pay the bill off, and that’s just on cladding, never mind anything else. And is that on the flat, or on the individual? It just creates huge problems’. Mr McPartland also warned the government that 10 Downing Street should take over, and that the nearly 40 Conservatives who signed an amendment to the Fire Safety Bill, barring leaseholders from having costs passed onto them, showed ‘the level of support’ within the party.
Mr McPartland also noted that he believed the top of the government was ‘worried by the strength of feeling inside the parliamentary party’ as a consequence, and that the exclusive focus on cladding costs ‘doesn’t help most people’. 10 Downing Street ‘has to get involved and take a grip of this situation, because it’s clear, the department [the Ministry for Housing, Communities and Local Government] doesn’t have a grip’.
Manchester leaseholder Giles Grover called the loans scheme ‘a terrible idea’, adding that ‘it will instantly depress property prices and push hundreds of thousands of people into negative equity.
‘The arbitrary distinction [of above or below 18m] is unfair because the causative issues were the same – government regulation and bad building practices – but they are only helping some of the people’. Campaign group Grenfell United added the plans fail to ‘deal with this mess once and for all’, noting that ‘residents living in unsafe homes will go to bed tonight worrying if their building will qualify or be left out once again. And bereaved and survivors of Grenfell will lie awake fearful that what happened to us could still happen again’.
It added that residents ‘shouldn’t be forced into loans and new debt just because of the height of their building. It’s completely unfair to pile more financial strain on leaseholders for a problem that has been caused by developers and the construction industry. The industry needs to be held fully responsible for what they have done – small levy doesn’t cut it’.
The Labour party said that the policy ‘betrayed’ the government’s promise ‘that leaseholders will not pay for the buildings safety crisis, with shadow housing secretary Thangam Debbonaire asking: ‘Why should the arbitrary height limit mean the difference between a safe home and financial ruin? Three and a half years on from Grenfell, hundreds of thousands cannot sleep at night because their homes are unsafe. The government has today decided to plough financial misery on to them. This is an injustice.’
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