The Fire Protection Association (FPA) is urging the government to completely remove the financial burden on leaseholders, following the pledge it made this morning to provide loans to those who have combustible cladding on their homes.
The government has pledged to provide up to £5bn in grants and loans to support leaseholders with unsafe cladding but, along with many other industry stakeholders, the FPA does not believe this goes far enough.
The FPA has been lobbying government for some time, and before Grenfell, to warn that unsafe building materials are being used to construct flats which house thousands of residents - and these loans would leave many with costs they simply cannot afford. We must hold those accountable for abusing the system, their failure to ensure competency and the mistakes made on the lead up to the Grenfell tragedy in 2017, as well as the current disarray of building regulations.
Jonathan O’Neill, managing director at the FPA, commented: 'It has now been more than three and a half years since the issue of combustible cladding surfaced as an issue for leaseholders. Whether the problems arose due to ambiguous and confusing legislation, a broken regulatory system, ignorance or incompetence in the construction sector, or suppliers of building products gaming the system; what is abundantly clear is that it was of no fault of the leaseholders who continue to face uncertainty despite today’s announcement.
'The government must act now and support all leaseholders, in all affected buildings regardless of their height, with grants to bring this debacle to a close. It should then be on the government to pursue those responsible through the courts to ensure the money is fully repaid. This has been going on for too long, it is completely unacceptable that we continue to have people living in buildings which are fundamentally unsafe and leaseholders facing financial ruin for believing that we had a regulatory system that was fit for purpose and robust.
'The FPA has made repeated requests for the government to ban the use of combustible materials on all high risk buildings; this situation is clearly of its own making and they must act now to bring this debacle to a close.'
The pledge from government announced today includes grants to remove cladding from blocks of flats higher than 18m. With an estimated 80,000 blocks of flats between 11m and 18m, there is still much work to be done.
The Guardian reported on the new £3.5bn fund to ‘fix cladding on high-rise buildings’, while money will also be provided for loans to leaseholders ‘to address problems in shorter buildings’. It was launched after ‘growing pressure’ from hundreds of thousands of leaseholders facing huge bills, as well as backbench Conservative MPs and the survivors and bereaved from the Grenfell Tower fire. With it estimated that around 274,000 flats have been fitted with dangerous cladding, according to the Association of Residential Managing Agents, the crisis is thought to now be ‘affecting more than 650,000 people’ nationwide.
This also does not take int account those living in lower rise structures ‘where problems have also emerged’, with those added meaning the figure ‘is likely to reach into the millions’. The announcement of extra funding by Housing Secretary Robert Jenrick builds on earlier government funding pledges for cladding remediation, though The Guardian pointed out that by the end of 2020 ‘fewer than half’ of the 462 affected buildings in England had been ‘completely fixed’.
In turn, works were only underway on 201, and had not even started on 45 buildings. The news outlet noted that both MPs and campaigners had said the existing funding ‘was not enough’ and ‘failed to cover’ other fire safety issues and interim costs, nor that it helped leaseholders ‘unable to sell their homes and facing a physical and mental toll’ that MPs had said ‘amounted to a public health crisis’.
Last week, it was reported that the Treasury was being beseeched to add a ‘substantial’ amount of cladding remediation funding, with a ‘Cabinet tussle’ over increased funding seeing pressure ‘mounting’ on Chancellor Rishi Sunak from Housing Secretary Robert Jenrick. Ministers were ‘considering’ imposing levies on construction firms, with government sources discussing the ‘intensive efforts’ made to add a ‘substantial sum’ to a developers levy.
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, including 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 meanwhile 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’. Leaseholders remained concerned the plans ‘do not go far enough and will still lumber them with huge long-term loans to pay’, which could take 30% off the value of homes.
The government was also said to be considering a hardship fund to provide extra help to those facing the largest bills; a cap on repayments to help those facing bills of up to £100,000; prioritising grants for those in high rise blocks ‘who are at most risk’; and a five year freeze on repayments until 2026 or later.
There were however ‘grave concerns’ expressed by the All-Party Parliamentary group for Leasehold Reform after their meeting with government adviser Michael Wade last month. Co chairman Justin Madders understood ministers were ‘going ahead’ with a loan scheme that ‘puts the majority of costs on the unquestionably innocent party. The government is going to frontload it in a way that gets the work done, but ultimately saddles people with huge debts’.
A fortnight ago, Prime Minister Boris Johnson promised that the government would provide a plan for the crisis ‘very shortly’, while Labour brought forward a vote and a list of proposals to parliament yesterday that aimed to protect leaseholders from paying for fire safety works – including remediating cladding.
December’s reveal that Mr 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’ had been reported earlier that month to have been in the form of flat owners taking on 30 year loans ‘akin to a second mortgage’ to fix fire safety issues.
Mr Wade, an insurance executive appointed last July, was said to have been ‘considering long-term loans’ as a solution to protecting leaseholders from ‘unaffordable’ costs ‘without burdening taxpayers further’. This was said 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.
Building Safety and Fire Minister Lord Greenhalgh had 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’, though later ‘advocated’ them as helping to allow developers to ‘regain the public trust needed to carry on in business’.
Most recently, Barratt became the first construction firm to call for a levy on developers to ‘bail out victims’ of the cladding crisis, with the company stating that the industry had a ‘collective responsibility’ to cover the costs. Despite this, leaseholders living in the company’s homes said they had ‘already paid tens of thousands’ for ‘stop-gap safety measures’ while waiting for repairs to begin.
Both MPs and campaigners welcomed the move, but while calling on ‘others to follow suit’, they also warned that developers must not be able to get away with ‘token gestures’. Most recently, leaseholders were reported to potentially see their insurance claims paid by the government.
Read our article 'What is cladding?' here