Cladding removal means a huge bill. Punishing taxpayers or homeowners is an uncomfortable choice for Conservatives.

5 Feb

On 14th June 2017, a fire broke out in the 24-storey Grenfell Tower block and resulted in 72 deaths. The tragedy shocked the nation. For some years we had been making progress in improving safety standards. 243 fire-related fatalities in 2019/20. Ten years earlier it was 328 – and 20 years ago it was 485. But the Grenfell disaster rightly prompted a focus on how we must do better. Two years after the fire, an inquiry concluded that aluminium composite material (ACM) cladding panels was the “primary cause”. By the time the report came out, the Government had already banned the use of combustible materials in the external walls of new buildings over 59 feet tall – or around six storeys.

“Remediation” work also got underway on existing buildings regarded as unsafe. Getting rid of the ACM cladding is being paid for by the taxpayer – at a cost of £600 million. So there will be no cost to tenants or leaseholders in such blocks – whether private, housing association, or local authority.

But there is also a requirement to remove cladding which, though not ACM, is still regarded as dangerous. In the case of council flats, each relevant local authority will pay, with the cost ultimately picked up by central Government. Neither council tenants nor leaseholders will be sent a bill.

It is when it comes to removing the non-ACM cladding from other properties – private and housing associations – that the difficulty arises. The Government has produced a £1 billion fund but it has reportedly been four times oversubscribed. There has been criticism that it will go to those best placed to complete the paperwork (usually housing associations) rather than for those buildings at the greatest risk.

So if the taxpayer does not pay the full cost then who should?

Chris Pincher, the Housing Minister, told Parliament in November:

“We expect developers, investors and building owners who have the means to pay to cover remediation costs themselves without passing on costs to leaseholders.”

But some are unclear what practical or legal measures that expectation rests on. Pincher added:

“But we recognise that there are cases where that might not be possible, and cases where there may be wider costs relating to historical defects. The Government are determined to identify suitable financial solutions and remove barriers to remediation. The Government have asked Michael Wade to accelerate his work with leaseholders and the financial sector to develop proposals to protect leaseholders from the costs of remediating historical defects wherever possible. However, we must also ensure that the bill does not fall wholly on taxpayers. We will update leaseholders on that work before the Building Safety Bill, which has just completed its prelegislative scrutiny, is introduced in Parliament.”

Pincher spoke again in a Commons debate on Tuesday. He was able to provide an update on important progress:

“All high-rise social sector buildings have either had their unsafe ACM cladding replaced or seen the work get underway.”

He also acknowledged that leaseholders should not be made to pay an unfair burden by the owner of the building simply hiking service charges to recoup the cost. But the details are complicated:

“There is no quick fix. If there were, we would have done it long ago. It is complex and it involves many parties: leaseholders with different leases, developers, warranty holders, the insurance industry, the mortgage lenders, and the owners themselves. We have to find a solution that is right and proper, that demands of owners and developers that they put right the problems and defects they caused, that is fair to leaseholders who should not have to carry unfair costs for problems that they did not cause or envisage, and that is fair to the taxpayer, who is already shouldering a significant burden in remediating many buildings.”

The Government has said that bills should not be “unaffordable” for leaseholders and thus proposed providing a guaranteed loan scheme to spread the payments. But these bills are substantial – the Daily Mail reports an average of £40,000. To make matters worse, it is hard to sell such properties. An EWS1 form has to be signed by a surveyor that such buildings are safe. The surveyors are understandably reluctant to do so. Sometimes those with flats in only five or six storey blocks have faced a refusal to sign – if, for example, there is a wooden balcony. Even where the requirement is met there is a backlog finding someone to carry out the inspection.

At Prime Minister’s Question Time this week, Sir Keir Starmer highlighted the case of a doctor in Sheffield with a £52,000 bill. Boris Johnson replied that “this is a problem that needs to be fixed.” He added:

“I very much appreciate and sympathise with the predicament of leaseholders who are in that situation, but we are working to clear the backlog, and I can tell him that my right hon. Friends the Chancellor and the Communities Secretary will be coming forward with a full package to address the issue.”

Those of us who are fortunate enough to manage to become homeowners understand that we face a risk of unexpected bills – sometimes for substantial funds. But the leaseholders bought in good faith, have been blameless and such bills do seem way beyond what could reasonably have been expected. Also why should some leaseholders pay but not others? Why private leaseholders but not council leaseholders? Why those with non-ACM cladding, while those with ACM cladding are let off? Why do some get an allocation from the £1 billion but not others?

Then again the developers and the building owners could point out that they too acted in good faith. They complied with the – very substantial and detailed – regulatory requirements. Perhaps the culprits are the officials who wrote the flawed regulations. But even if we had a clear-out of such staff at the Ministry of Housing, Communities and Local Government, it would not solve the problem we now face.

Shifting the cost to the state would recognise that it was the state to blame. The law was followed but the law was deficient. In practice that means more burden on taxpayers – millions of whom would love to become homeowners despite the evident risks involved.

But a better alternative would be sprinklers. The Chief Fire Officers Association points out that nobody has ever died in a fire, in the UK, in a property with a properly installed sprinkler system. The implications of that are very powerful. Putting in sprinklers would be more effective than all the other measures combined. Removing cladding, the “waking watch” staff, the concierge staff, removing plastic window frames, putting in fire doors, electrical appliances checks. All would be superfluous provided a modern sprinkler system is in place.

Ronnie King, an acknowledged expert in this field, has told me the case for installing sprinklers in all blocks of flats is overwhelming.

This report from a study of a retrofitting project in Sheffield says:

“Perhaps the key finding of the project is that the installation cost is less than £1,150 per flat. This is significant in that it is significantly less than had been estimated and illustrates how economically such a scheme can be retrofitted in occupied premises without undue disruption.”

It seems perverse that such huge sums are being spent, when an alternative is available, at a fraction of the cost, and that has a one hundred per cent safety record. Where sprinklers are installed an exemption should be offered to other requirements which are both less effective and more onerous.

Felicity Buchan: We need new homes that are safe

12 Aug

Felicity Buchan is the MP for Kensington.

There are two things that the vast majority of people would agree with:

  • As a country, we need more homes – well built and appropriate to their surroundings;
  • We need to kickstart our economy.

A substantial programme of new housebuilding is the answer to both of those. Through apprenticeships and traineeships, we can increase job opportunities in the construction sector to drive the economic recovery, while building hugely needed new homes.

This issue – of ensuring that everyone has a safe, secure home they can afford – is personal for me. As the MP for Kensington, which includes Grenfell Tower, I am acutely aware that each person should go to sleep at night in a safe and secure home. Good housing has a profound impact on health, wellbeing, educational attainment, and economic success. The prevalence of coronavirus in communities where overcrowding is common, is another wake-up call for the need for more housing. We need to adopt a two-step approach: ensuring our existing housing stock is safe and fit for purpose, while building more housing.

I am very supportive of the Government’s overhaul of our building safety regime with the Fire Safety Bill (which had its Second Reading in April) and the draft Building Safety Bill (which was introduced to Parliament in July). If there is to be any positive legacy from the Grenfell fire, it must be that a tragedy of this kind is never allowed to happen again and that our building and fire safety regime is state of the art.

But we also need to correct the fundamental shortage of housing, in particular of affordable housing. Many people working in our vital services and many young people struggle to find an affordable home within a suitable distance from their employment, and this is certainly a significant issue in Kensington.

We have seen the Government commit to increasing the supply of affordable housing by allocating £12.2 billion for the Affordable Homes Programme for homes to be delivered from 2021/22 over the next five years. In June 2020, Government estimated this would deliver up to 180,000 new affordable homes.

We need a range of tenures in our new affordable housing, including socially rented and intermediate ownership. Clearly new housing needs to be sympathetic to its surroundings; and I would strongly recommend a focus on developing brownfield sites, with developments of a height and massing in keeping with the local area.

As we respond to coronavirus, we must focus not just on saving lives, but on saving livelihoods. Housebuilding is crucial to rebuilding a strong economy, and brings with it skills and employment opportunities. Research from the Centre for Economics and Business Research and the National Housing Federation had calculated that £4.8 billion would be added directly to the economy, and 86,000 jobs would be supported, if 90,000 affordable homes were built a year. When indirect spending is added, this rises to £11.2 billion and 200,000 jobs. Furthermore, the Government estimated in the Budget 2020 that its £12.2bn investment in affordable housing should generate an additional £38 billion in public and private investment, an enormous uplift.

Community organisations and businesses also have a role to play. In December last year, I visited a housing association scheme for young people at risk of homelessness in Kensington, run by Evolve Housing and Support. It was inspiring to see young people learning skills and receiving the support that can set them up for life.

A government-backed building programme also provides an opportunity to encourage investment in green, sustainable development. As a member of the Conservative Environment Network, I have been particularly involved in lobbying the Government for a Green economic recovery from the coronavirus pandemic. The Green Home grant scheme is an excellent step in improving our existing housing stock; we also need to build energy efficient new affordable housing developments.

Building new affordable homes is a rare example of a “win win”: providing the safe and secure new homes people need, while fuelling the recovery of the construction sector and the economy as a whole. These homes can be a lasting positive legacy: well built, energy efficient, and sympathetic to their local areas.

Let’s combine these aims to make sure we build back better.