A Westminster Hall debate on the ‘Household overcrowding and the covid-19 outbreak’ has been scheduled for Wednesday 10 March 2021 at 4:50pm. The debate has been initiated by Stephen Timms MP.
Documents to download
Leasehold high-rise flats: who pays for fire safety work? (771 KB, PDF)
Following the Grenfell Tower fire in June 2017, the Government established a Building Safety Programme with the aim of “ensuring that residents of high-rise residential buildings are safe, and feel safe from the risk of fire, now and in the future.”
At 31 January 2021, 461 high-rise residential buildings and publicly owned buildings had ACM cladding systems unlikely to meet Building Regulation guidance. Of the 461 identified blocks, 132 blocks were yet to be remediated.
Remediation work is complex, and the associated costs are significant. The question of who is responsible for paying for remedial works has been described as “a legal quagmire” and is at the forefront of debates about how quickly the necessary work can be carried out and the financial implications for some residents, particularly those living in privately owned blocks.
Funding to remove ACM cladding
On 16 May 2018, the Government announced that it would meet the reasonable cost of the removal and replacement of unsafe cladding by councils and housing associations. Although the Government argued that the cost of remediation work should not fall on individual leaseholders in affected private blocks, not all developers/freeholders responded positively to these calls. On 9 May 2019, James Brokenshire, then-Secretary of State at the Ministry of Housing, Communities and Local Government (MHCLG) announced that the Government “will fully fund the replacement of unsafe aluminium composite material (ACM) cladding on high-rise private residential properties where building owners have failed to do so.” The deadline for submitting applications was 31 December 2019. The expectation was that ACM cladding would be removed by June 2020 in all but exceptional cases. At 31 January 2021, 100% of social sector buildings and 84% of privately owned buildings had started or completed remediation of ACM cladding.
Funding to remove non-ACM combustible cladding
In the March 2020 Budget, the Government announced that it would provide £1 billion in 2020 to 2021 “to support the remediation of unsafe non-ACM cladding systems on residential buildings 18 metres and over in both the private and social housing sectors.” The registration process for the Building Safety Fund opened on 1 June and closed on 31 July 2020. Applications for funding are only being considered from building owners, freeholders or responsible entities who registered. The deadline for submitting funding applications was initially 31 December 2020, but on 17 December the Government announced an extension to 30 June 2021.
Additional funding for cladding removal February 2021
On 10 February 2021, Robert Jenrick announced additional funding of £3.5 billion for the removal of combustible cladding on high rise blocks of 18 metres and above. Where cladding needs to be removed from lower and medium rise blocks, the Government intends to develop a long-term low interest loan scheme under which “no leaseholder will ever pay more than £50 a month towards the removal of unsafe cladding.” The loan scheme will apply to blocks between 11 and 18 metres.
The funding announcements have been welcomed by stakeholders but there are significant ongoing concerns. The Housing, Communities and Local Government (HCLG) Select Committee highlighted several issues in its June 2020 report Cladding: progress of remediation. They span the following areas:
- The adequacy of available funding. The Public Accounts Committee (September 2020) said “The Department is not fully funding the replacement of forms of dangerous cladding which are different from that used on Grenfell Tower”.
- Exclusions from the Building Safety Fund for non-ACM cladding removal. For example, funding is not available where work was committed to or started before 11 March 2020.
- The lack of assistance in tackling other fire safety defects and interim measures (e.g. waking watch costs).
- The impact on leaseholders who are facing rising costs and are unable to sell their homes. The Committee described the physical and mental toll on affected leaseholders as representing a public health crisis.
The Government response (September 2020) made clear the expectation that building owners should bear some of the cost of making their buildings safe. Michael Wade, senior advisor to the Cabinet Office, was appointed to “work on identifying options for financing historic remedial works that are not covered by the £1.6 billion funding.”
HCLG Committee published a report on its pre-legislative scrutiny of the draft Building Safety Bill on 24 November 2020. The Committee was critical of the Government’s apparent shift in emphasis from saying that it would be unacceptable for leaseholders to pay for historic safety defects, to a suggestion that leaseholders should be protected from “unaffordable costs”. The Committee called on the Government to provide necessary funding upfront given the urgency of the work, and for action to be taken to ensure those responsible contribute to the cost. Concerns were raised about provisions in the draft Building Safety Bill which would introduce a Building Safety Charge. The Committee believes the charge would:
…permit leaseholders to be charged for the cost of remediating historical safety deficiencies for which they were not responsible, which may have pre-dated their occupation, and regardless of whether at the time of any earlier work the building complied with prevailing safety requirements.
The Committee called for amendments to the charge to ensure it cannot be levied to cover the cost of rectifying historic defects. In the meantime, a new clause was added to the Fire Safety Bill 2019-21 in the House of Lords which would prohibit the passing on of the cost of remedial fire safety works to tenants or leaseholders. The Bill is scheduled to return to the Commons for the consideration of Lords amendments on 24 February 2021.
The National Audit Office (NAO) published its Investigation into remediating dangerous cladding on high-rise buildings in June 2020 which highlighted issues with the time taken to complete remediation; a lack of information on the number of care homes with combustible cladding; difficulties building owners would face in trying to recover monies via legal action; and administrative challenges associated with the Building Safety Fund.
The Public Accounts Committee (PAC) published Progress in remediating dangerous cladding on 16 September 2020 in which it criticised the pace of progress; the proposed means of allocating funding under the Building Safety Fund; and the lack of “a clear rationale” for the size of the fund:
The £1 billion fund will meet only around one-third of the estimated £3-£3.5 billion costs. The Department says it will distribute its funding on a ‘first come, first served’ basis, but could not say how it would sort applications in rank order, nor could it guarantee that funding would be prioritised according to financial need.
The Government accepted a number of the PAC’s recommendations in its response published in November 2020. As noted above, additional funding of £3.5 billion was announced for remediation of cladding on high-rise blocks on 10 February 2021. On 1 February 2021 the Commons voted in favour of a Labour motion calling for additional funding and support for leaseholders (Conservative Members abstained):
That this House calls on the government to urgently establish the extent of dangerous cladding and prioritise buildings according to risk; provide upfront funding to ensure cladding remediation can start immediately; protect leaseholders and taxpayers from the cost by pursuing those responsible for the cladding crisis; and update parliament once a month in the form of a written ministerial statement by the Secretary of State.
Motions tabled on opposition days are not considered to be binding on the Government.
The additional £3.5 billion in funding has been welcomed but leaseholders and commentators point out that it will not address all outstanding issues, for example:
- There is no funding for non-cladding related remedial works although a myriad of building safety issues has been revealed following inspections. HCLG Committee said that addressing all fire safety defects in every high-rise or high-risk residential building could cost up to £15 billion. This compares with total Government funding for cladding remediation to date of £5.1 billion.
- There is no assistance for blocks under 11 metres requiring cladding remediation work.
- There are questions about the operation and impact of the proposed low interest loan scheme. Leaseholders in eligible blocks of between 11 and 18 metres are concerned that a loan scheme does not fulfil the commitment that they should not have to pay for necessary works. The Government response to the HCLG Committee’s report on cladding remediation said:
The Government is clear and unwavering in its view that it is unacceptable for leaseholders to have to worry about the cost of fixing historic safety defects in their buildings that they didn’t cause.
This paper considers progress in implementing remediation works and issues raised by landlords and residents. The final section provides brief information on the position in Wales, Scotland and Northern Ireland.
Affected long leaseholders should seek professional legal advice and assistance. The Leasehold Advisory Service and the Leasehold Knowledge Partnership (which also acts as the secretariat for the All-Party Parliamentary Group (APPG) on leasehold reform) are potential sources of advice. The LKP has a dedicated email address: firstname.lastname@example.org.
Documents to download
Leasehold high-rise flats: who pays for fire safety work? (771 KB, PDF)
Housing market: Data on house prices, mortgage approvals and house-building.
The 2015 Conservative Government committed to extend the Right to Buy to assured tenants of housing associations on a voluntary basis. The Conservative Party's 2019 Manifesto said the voluntary Right to Buy scheme would be maintained. No implementation date for full roll-out has been announced. A large regional pilot scheme in the Midlands was launched on 16 August 2018. An evaluation of the findings was published in February 2021. The Government has said that the impact of the pilot scheme will be assessed before decisions are made on the next steps. This paper provides background on the statutory Right to Buy and commentary on progress in developing and extending it to assured housing association tenants as a voluntary scheme.