THE PARTY called for the creation of a national cladding taskforce to oversee remediation work, with leader Sir Kier Starmer outlining six ‘key demands’ as part of a ‘major escalation of its intervention in the building safety debate’.
Inside Housing reported on Labour’s proposals to ‘fix the cladding crisis’ ahead of a debate in Parliament today, with the party calling for a national cladding taskforce to oversee cladding remediation, which has been ‘successfully applied’ in Victoria, Australia ‘where a statewide taskforce has led the effort to identify, prioritise and remediate’ combustible cladding.
In contrast, it said, England’s ‘decentralised approach means we still do not even have a comprehensive figure for the number of buildings affected’. The party’s six demands included ‘immediate up-front funding for removing’ cladding as well as ‘other urgent fire safety work’; protection of leaseholders and taxpayers ‘by pursuing those responsible for the cladding scandal for costs’; and a ‘new, legally enforceable 2022 deadline to make homes safe’.
Its other demands consisted of legislation ‘to protect residents from costs’; ‘getting the market moving’ by ensuring those affected can sell and remortgage homes; and ‘stamping out rogue builders’ via reform of the sector. A symbolic vote will be forced in parliament today, and will be accompanied by an amendment to the Fire Safety Bill ‘seeking to achieve the same result when that legislation returns to the house’.
Sir Kier was also set to visit residents in an affected block in south east London today, with Inside Housing noting that the party also published analysis that suggested 11m people might be affected by the cladding crisis, or ‘one in every five people in England’. The party’s previous manifesto called for the creation of a taskforce, but this ‘is the highest prominence’ it has given the building safety crisis that has ‘swelled in scale over the last year’.
Labour’s analysis, from the New Build Database and the Office for National Statistics, ‘suggests the cladding scandal could be even larger than previously thought’, with up to 4.6m properties affected housing an average of 2.4 residents each. The taskforce would be given ‘strong powers to establish the full extent of dangerous materials on buildings’, as well as ‘prioritise them according to risk’ and ensure enforcement ‘against those who refuse to undertake works.
The Australian system, set up in 2014 after the Lacross Tower fire in Melbourne, saw the Victoria state authority identify dangerous cladding systems, with this ‘majorly stepped-up’ post Grenfell, allowing the taskforce to ‘take control of the identification and remediation of dangerous buildings’. An audit on all apartment buildings, hotels, motels and student accommodation over three storeys commenced, as well as of all hospitals, care homes and schools over two storeys.
This consisted of an onsite inspection, followed by a review by a municipal building surveyor ‘who gave immediate advice on necessary interim measures’. Altogether, 2,227 buildings were audited, and 1,069 had combustible cladding, with 500 having been considered ‘high or extreme risk’, and thus the first to be remediated. As buildings are owned by residents, not a private freeholder, the taskforce works with them to assign builders, project managers and manage through to completion.
Labour criticised the government for allocating remediation funding on a ‘first come first served basis’, an ‘inefficient use of government funds’, and it called for prioritising affected buildings by risk, as well as pledging new legislation to protect leaseholders ‘from being passed historic fire safety costs, enforcement powers against owners refusing to start work, banning gagging clauses for residents in unsafe blocks and ‘measures to make it easier to recover costs from bad builders’.
Sir Kier said: ‘Today needs to be a turning point for those affected by the cladding scandal. Millions of people have been sucked into this crisis due to years of dither, delay and half-baked solutions from the government. For many leaseholders, the dream of home ownership has become a nightmare. They feel abandoned, locked down in flammable homes and facing ruinous costs for repair work and interim safety measures.
‘I urge Conservative MPs to vote with us in Parliament and put their constituents’ safety and security first. And I urge the government to get a grip of this crisis through a national taskforce and by implementing Labour’s six demands.’
Inside Housing noted that ‘despite tasking local authorities with cataloguing the number of affected towers in 2019’ this process ‘has stalled and there remains no definitive answer as to the scale of the crisis’, with current funding ‘known to be insufficient’.
An MHCLG spokesperson said: ‘Leaseholders shouldn’t have to worry about the unaffordable costs of fixing safety defects in high-rise buildings that they didn’t cause - and should be protected from large-scale remediation costs wherever possible. We all want to see homes made safer, as quickly as possible and backed by our £1.6 billion funding we are making good progress on remediating unsafe homes.
‘The Building Safety Bill is the appropriate legislative mechanism for addressing these issues and will be brought forward in due course.’
Last week, Prime Minister Boris Johnson promised that the government would provide a plan for the crisis ‘very shortly’, responding in parliament to a question from Labour MP Seema Malhotra, who asked whether the government would ‘come forward with a plan to fix this crisis which does not burden the leaseholders with the costs’.
In response, he said ‘of course we will, and I know [Housing Secretary Robert Jenrick] will be bringing forward a plan very shortly’, which might refer to December’s reveal that Michael Wade – the government’s advisor appointed to advise on cladding issues – had been ‘working on a proposal to provide long-term finance to buildings to pay for remediation work’.
Earlier that month, this was rumoured to have been in the form of flat owners taking on 30 year loans ‘akin to a second mortgage’ to fix fire safety issues. A source close to the Ministry for Housing, Communities and Local Government (MHCLG) claimed that Mr Wade, an insurance executive appointed last July, was ‘considering long-term loans’ as a solution to protecting leaseholders from ‘unaffordable’ costs ‘without burdening taxpayers further’.
This was said at the time to potentially mean ‘hundreds of thousands’ of flat owners could ‘be forced to take on 30-year loans akin to a second mortgage’ to fix issues. Campaigners argued that such proposals would leave leaseholders in negative equity, and hit ‘those who can least afford it the hardest’ as developers, builders and freeholders of fire risk blocks ‘escape the burden’.
Around 200,000 high rise flats are wrapped in combustible materials, with 1.27m modern flats – or 5% of private homes in England – potentially ‘unmortgageable for years’. A loan of £30,000 to fix a ‘typical mix of risky cladding, missing fire stops and flammable balconies’ would add around £1,500 per year to household bills at a 3% interest rate.
An alternative proposal from the Leasehold Knowledge Partnership charity suggested the government lend funds for repairs to a special purpose vehicle, which would then ‘lend for buildings to be fixed quickly’, and utilise mechanisms including annual levies on developers and freeholders paying interest.
This would be done ‘at a rate of return comparable to gilts’, so that taxpayers would not have to fund it. However, Building Safety and Fire Minister Lord Greenhalgh told the House of Lords in December that levies ‘do not raise very much, and you have to balance that with the need to build more homes’.
Mr Wade was attempting to arrange the funding mechanism via 30 year finance deals at rates of 1% to 1.5%, with the deals entered into by buildings, via owners or responsible persons, who would ‘recoup the cost of repayments from leaseholders, and he was said to have told stakeholders that private finance ‘is the only solution as the Treasury has made a definitive statement that it will not provide a penny more in additional grants for removal’.
He added that should the proposals be adopted, ‘it would be possible to seek additional funds from future parliaments, developers or other entities to reduce the size of the loans’, and was understood to have been ‘working on an assumption that the average bill’ for leaseholders is about £20,000 each, so repayments over 30 years could be around £800 per year.
The proposal has been criticised by campaign groups who described it as a ‘grave injustice’, and said it would show the industry ‘that it will not be made to pay for its failures’. While the government has ‘made it clear that it has not adopted the plan as policy’, it was understood that meetings ‘have been held in recent weeks’ between MPs and MHCLG to ‘outline’ the plans.
A letter sent a fortnight ago by Chancellor Rishi Sunak to cladding campaigners said that the government is ‘working at pace to develop financial solutions’, and that Mr Wade’s appointment was to ‘accelerate work with the financial sector and insurers to develop proposals to protect leaseholders from unaffordable costs’.
Earlier this month the government was said to be considering funding fire safety works on residential blocks via a £2bn levy on developers - which could raise up to £200m a year for a total of £2bn in 10 years, and ‘could mean a levy on all high rise flats and [a] separate charge on major builds’ to ‘atone for building tens of thousands of flats and homes with unsafe cladding and insulation in recent decades’.
The proposals are part of the package of measures being discussed by Mr Sunak and Mr Jenrick, and include two annual levies to ‘ease the financial burden on leaseholders’, including adapting the existing community infrastructure levy that sees developers ‘pay to improve the community in return for planning permission’.
The second would be a ‘gateway levy’ that would see developers pay a levy on new high rise flat blocks, which would ‘meet demands by campaigners’ to ‘stop big developers shirking their responsibility’, and the proposals are ‘advocated’ by Lord Greenhalgh, who said levies would help developers ‘regain the public trust needed to carry on in business’.
He was also quoted as having said: ‘A generation of people have built buildings that are not fit for purpose. In recent years developers have made profits of between 20 per cent and 30 per cent. Of course they should step in and do the right thing. The solution will include a levy on the development community.’
A government source added: ‘A levy is in keeping with “the polluter pays” principle. We may not be able to hold the industry legally responsible, but we can hold it morally responsible and make it contribute to putting things right.’
Read our article 'What is cladding?' here