Unsafe cladding - extra £3.5 billion fund announced

4 minute read
11 February 2021



This insight was published prior to the Building Safety Act receiving Royal Assent on 28 April 2022. As such, whilst accurate at the time of publication, its contents may have been superseded by the changes implemented by the Act or its related secondary legislation.

You can find a list of all Gowling WLG articles relating to the Building Safety Act here.

Earlier in February 2021, we reported on the Commons debate and a vote brought forward by the House of Lords on amendments to the Fire Safety Bill relating to the remediation costs associated with the replacement of the dangerous cladding panels. 

On 10 February 2021, the Housing Secretary, Robert Jenrick announced an extra £3.5 billion fund to remediate buildings over 18 metres tall in England, taking the total fund to £5.1 billion.

Robert Jenrick said it was the "largest ever government investment" in building safety and told the Commons leaseholders in high-rise buildings above 18m, or with six storeys or more, would face no costs for cladding works.

The announcement also provides hope for leaseholders of low and mid-rise properties.  Robert Jenrick said the risk was "significantly lower" for lower-rise blocks of flats; however, where cladding needed to be removed, he announced a long-term government financing scheme to protect leaseholders which would mean no leaseholder would pay more than £50 a month for the removal of unsafe cladding on properties of between four and six storeys high.

Levy on developers

It "cannot be right the costs fall solely on tax payers", Mr Jenrick said, adding that the government would develop a £2 billion levy targeted at developers seeking to build certain high-rise buildings in England over the next decade.

He also said a new tax for the UK residential property sector would be introduced from 2022, raising money to help pay for the removal of cladding.

Labour's shadow housing secretary, Thangam Debbonaire, called the proposals "an injustice" that would "pile financial misery" on homeowners.

She said there were many questions left unanswered, including on "skyrocketing" insurance costs and homes potentially remaining "unsellable".

Labour wants an independent taskforce to be established to take the matter out of politicians' hands and ensure funds are distributed fairly.

The small print

The detailed proposals will no doubt come to light over the coming days but it is expected that there will be - as has been the case for the three previous Building Safety Funds - a whole host of conditions and eligibility criteria to be met together with exclusions and limits on funding.

This extra £3.5 billion is also only directed at dangerous cladding remediation and not other fire safety defects, so it is expected that this will do little to ease leaseholders concerns or make their properties more saleable.

We will continue to keep you appraised of the details as they become available.

If you have queries on this alert or any construction issue, please contact Sue Ryan.

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