The housing secretary, Robert Jenrick, has announced a new £3.5bn fund to fix dangerous cladding on high-rise buildings in England and further loans for leaseholders to fix similar problems in shorter buildings, with maximum monthly repayments of £50 a month.
The cash grants would be offered to leaseholders in residential buildings in England over 18 metres tall, or above six storeys, so they faced no costs for cladding remediation works, Jenrick told parliament. He claimed it was the “largest ever government investment in building safety”.
Anyone living with dangerous cladding on buildings between four and six storeys will not be covered by grants, but will be able to access a new system of long-term low-interest loans. This was because government experts had repeatedly determined risks were significantly lower in shorter properties, the housing secretary said. He acknowledged that many home owners had “found themselves caught in an absolutely invidious position”.
He also announced a new levy on developers to cover the cost of grants and their “historical responsibility”, which will be applied when they seek planning permission to build high-rise buildings. A separate tax will be introduced from next year on money made in UK residential property development to raise £2bn over a decade and help pay for cladding remediation.
”I appreciate the frustration, the worry and at times the despair that [leaseholders] feel,” Jenrick said. “I understand their anger at the errors, omissions, false promises and even the outright dishonesty that came before us, built up over many decades.”
Labour said the measures did not help fix fire safety problems not related to cladding that had emerged after the Grenfell Tower disaster, and that by offering loans rather than grants on shorter buildings it denied justice to thousands of people.
“The government has betrayed their promise that leaseholders will not pay for the buildings safety crisis,” the shadow housing secretary, Thangam Debbonaire, told the Commons. “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.”
There had been growing pressure for action from hundreds of thousands of leaseholders facing bills rising in the worst case to more than £100,000, backbench Tory MPs and survivors and bereaved from the June 2017 Grenfell Tower disaster. The Grenfell fire led to a nationwide search for similar safety breaches.
It is estimated that around 274,000 flats have been fitted with dangerous cladding, according to the Association of Residential Managing Agents, affecting more than 650,000 people. That figure is likely to reach into the millions when those living in lower-rise structures where problems have also emerged are taken into account.
People affected by the cladding crisis have been unable to sell their flats because mortgage companies will not lend against them and have faced spiralling bills to pay for remediation works which freeholders and developers have in some cases refused to fund. It has sparked a financial and mental health crisis for many.
Since Grenfell there have been at least two serious cladding fires in buildings lower than 18 metres. One was at the six-storey Samuel Garside House in Barking, east London in June 2019 when fire tore through timber cladding and balconies. The other was at the Cube, a six-storey student accommodation block in Bolton in November 2019, where high-pressure laminate cladding panels burned.
Stephen Greenhalgh, the building safety minister, has previously estimated there are as many as 1,700 high-rise buildings in England with fire safety problems that relate to non-ACM cladding, such as timber or high-pressure laminate panels.
Jenrick’s announcement is the latest of several extensions to the government funding to make buildings safe. In May 2018, ministers said they would fund the removal of Grenfell-style aluminium composite material (ACM) cladding on high-rise social housing and a year later extended that to tall private blocks. By the end of 2020, fewer than half of the 462 affected buildings in England had been completely fixed, with works under way on 201, and not having started on 45.
In March 2020, the chancellor announced a £1bn building safety fund to help fix non-ACM cladding systems on high-rise blocks.
But MPs and campaigners said the money was not enough and failed to cover other fire safety defects and interim safety costs, such as waking watch patrols. They said it did not help leaseholders unable to sell their homes and facing a physical and mental toll which MPs on the housing and local government committee said amounted to a public health crisis.