Government Announces Funding, Loans and Levy to Replace Dangerous Cladding

THE GOVERNMENT HAS unveiled a five-point plan to help pay for the replacement of unsafe cladding on high rise buildings.

Housing Secretary Robert Jenrick announced a £3.5 billion increase in funding for removing and replacing the unsafe cladding in residential buildings of 18 metres (6 storeys) and over in England.

Lower-rise buildings of 11-18m high will be offered a new scheme to pay for unsafe cladding removal through a long-term, low interest, government-backed loan. The loan repayments are capped at £50 a month for leaseholders.

The move is despite numerous calls by MPs for leaseholders not to be left to foot the bill for the failure to regulate the safe cladding of buildings.

James Talman CEO NFRC

NFRC CEO James Talman, said: “It cannot be right to expect leaseholders to pick-up the bill for the cost of cladding remediation.

“Therefore, it is welcome that the government has today announced the largest ever investment in building safety, to ensure the cost of remediation is covered. We will continue support the government to make sure that all unsafe cladding is swiftly and safely replaced, and that this is done by competent installers.”

Developer Levy

The Housing Secretary also announced plans to introduce a, ‘Gateway 2’ developer levy. The levy will apply when developers seek permission to develop certain high-rise buildings in England.

In addition, a new tax will be introduced for the UK residential property development sector. This will raise at least £2 billion over a decade to help pay for cladding remediation costs.

The Government says the tax will 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.

The government says it is also working with RICS to provide state-backed indemnity for professionals to complete EWS1 forms.

Several banks and building societies welcomed the announcement as a positive step forward for homeowners, prospective buyers and surveyors.

Industry Response

Contractor Cladding Capacity

Peter Johnson, Chairman of Vivalda Group

Peter Johnson, Chairman of Vivalda Group, cladding fabricators and distributors, said: “While I broadly welcome this as a step in the right direction, this figure still falls a long way short of the £15bn fund that the select committee recommended to fix unsafe cladding on all high-rise buildings. Nevertheless, there remain challenges to implement such a plan.

“Right now, the cladding sector is pretty much working at full capacity – in terms of the skilled workforce available to fix cladding safely onto buildings. Installing cladding is a skilled job and without a significant increase in trained, qualified people, I can’t see how the industry can deliver such a huge project at scale.

“I understand various training schemes have been discussed and may well be in process, using tried and tested organisations such as the CITB and NFRC. However, it appears they have been put on hold due to lockdown. I urge the government to re-engage these training organisations and construction bodies as soon a safely possible to get these training schemes up and running with great urgency.

“Clearly, it is only right and proper for the Government to be putting adequate funds in place to fix this national disgrace, but it should also be focusing on the barriers to delivery, such as skills shortages. Lack of available skilled labour could be the Achilles Heel of the remediation work.”