Social Housing Speed Read – New building safety measures announced

Mr Gove’s headline announcement was a £4bn fund to pay for the removal of dangerous cladding on buildings between 11 and 18.5 metres in height. This marked a substantial change in policy, where previously the government had promised only to remove unsafe cladding from buildings over 18m high.

It is notable, however, that this £4bn will not come from the government, but is instead intended to be gathered through contributions from the UK’s largest house builders in a bid to make firms pay for the removal of unsafe cladding.

Plainly, the industry will need some convincing to provide this funding. Mr Gove has stated that he is willing to impose a “solution in law” if the industry fails to take responsibility. However, as the Treasury have not given Mr Gove the power to impose new taxes, the threat of legislation perhaps has less of a sting than it first seems. Another method of leveraging funding from the industry at the DLUHC’s disposal is the threat of withdrawing government funding from those who don’t comply.

The extent to which the DLUHC will be successful in garnering funding is yet to be seen. In any case, it can be expected that the origin of this funding will take a considerable amount of time to work out. Leaseholders will watch this space with interest over the coming months.

Assuming this funding is gathered, there are some points of note for leaseholders:

• The new fund relates solely to lower-height buildings between 11 metres and 18 metres high. They extend the remit of the Building Safety Fund, which applies to 18m+ buildings, but remain a separate fund.
• It is perhaps most noteworthy that the new fund, as with the Building Safety Fund before it, apply only to cladding, and cannot be relied on for other failed fire prevention devices such as defective fire breaks or insulation. As leaseholders already seeking relief under the building safety fund have often complained, this restriction can still leave them with significant costs – just not in respect of cladding.
• This fund will also only be available to flat owners who haven’t yet paid to have cladding removed. As such, there will not be any refunds or orders for developers to pay back leaseholders for costs incurred. Even where the fund is available, it is not explicitly clear what costs will be covered. Costs at the fringe of the crisis, such as increased insurance premiums, may or may not be included.

Despite the various uncertainties and limitations within this announcement, Leaseholders may take some assurance from Mr Gove’s repeated promises, made while taking questions in the House of Commons, that the government would amend the Building Safety Bill to protect leaseholders from paying any building safety crisis remediation costs, including non-cladding works.

However, with the source of the funding murky at best, it is again not clear at this stage who will pay these costs.

As an early step in this direction, and in the interests of keeping remediation costs affordable for whichever body/bodies do end up paying them, Mr Gove announced that new guidance would be published, aiming to help assessors/surveyors make a proportionate assessment of remediation works required to properties, and to dissuade overly cautious recommendations. This guidance is yet to be published, although early drafts have been met with some scepticism as to the extent to which it differs from the previous guidance in practice.

Ultimately, the extent to which this will result in more proportionate costs – a cost that can be met by someone other than leaseholders – remains to be seen. However, leaseholders can be optimistic that the DLUHC’s announcement represents a policy shift which will be more favourable to them than seemed likely previously.

If you have any questions on the above and how it will affect social housing providers, or any other questions as a social housing provider, please do not hesitate to contact John Murray or a member of our expert Social Housing Team.