Cladding crisis: What is the Government's new £3.5 billion scheme?

10 February 2021, 16:02 | Updated: 13 February 2021, 14:19

By Patrick Grafton-Green

The Government has promised to provide a further £3.5 billion to fix the cladding crisis affecting thousands of flat-owners in England.

Making the announcement in the House of Commons, Housing Secretary Robert Jenrick called the plan “unprecedented” and pledged a "world class building safety regime".

Flat-owners face huge bills as fire-safety improvements are brought in in the wake of the Grenfell Tower disaster.

Seventy-two people lost their lives in the 2017 fire, when the flames spread because of flammable cladding.

READ MORE: Tory MP blasts 'incompetent' Housing Secretary over cladding crisis

READ MORE: Cladding crisis: Flat owners 'exploring bankruptcy and facing bills of over £100,000'

What has been announced?

An extra £3.5bn has been promised by the Government to fix the cladding crisis.

This is on top of the £1.6bn safety fund that leaseholders could already apply to.

High rise buildings

Leaseholders living in high rise buildings that are over 18 metres high and have dangerous cladding will face no extra costs to remove it, Mr Jenrick said.

He said he was "making an exceptional intervention" and "providing certainty that leaseholders in high-rise residential buildings will face no costs for cladding remediation works".

He told the Commons: "We will make further funding available to pay for the removal and replacement of unsafe cladding for all leaseholders in high-rise residential building of 18-metres and above – or above six storeys – in England.

"This funding will focus on the higher-rise buildings where the independent expert advisory panel tells us – time and again – the overwhelming majority of the safety risk lies."

"This will ensure that we end the cladding scandal in a way that is fair and generous to leaseholders," he added.

Further details on building eligibility can be found on the Government's website.

Low and medium rise blocks

Those in low and medium rise blocks will have access to loans to replace unsafe cladding.

Mr Jenrick insisted they will never have to pay more than £50 a month for cladding removal work.

He said: "The Government will develop a long-term scheme to protect leaseholders in this situation, with financial support for cladding remediation on buildings between four and six storeys.

"Under a long-term low-interest scheme, no leaseholder will ever pay more than £50 a month towards the removal of unsafe cladding, many far less."

He said "the very generous financing scheme which will run for many years" meant the Government was providing more than £5bn in total to tackle the cladding crisis.

However the Government has been criticised for failing to offer more than loans to buildings under 18m.

Mayor of Greater Manchester Andy Burnham asked: "How on earth can the government justify this unfair and divisive move?"

"The Cube in Bolton was below 18m but it burnt as quickly as Grenfell," he added on Twitter.

How is the scheme it being funded?

To help meet the costs, Mr Jenrick said the Government is imposing a new levy on developers of certain high buildings in England and a UK-wide tax on the residential development sector, which it said will raise at least £2bn over a decade.

He said, without the Government's intervention, many building owners would have continued to pass on the costs of cladding remediation work to leaseholders.

"That would risk punishing those who have worked hard, who have bought their own home, but through no fault of their own have found themselves caught in an absolutely invidious situation," he said.

Criticism

Conservative MP Stephen McPartland branded Mr Jenrick "incompetent" on LBC.

Mr McPartland, a prominent critic of the Government's handling of the cladding crisis, told Tom Swarbrick: "It's clear he doesn't understand what's happening.

"They don't have a grip of the issue. It's incompetence and I think it's time the Prime Minister stepped in."

He added on Twitter there had been no mention in the plans "of fire safety defects, Waking Watches or Excessive Insurance Premiums which are often the main costs for millions of leaseholders".

Labour's shadow housing secretary Thangam Debbonaire said the Government is still under-estimating the scale of the problem.

"They still don't know how many buildings are unsafe, where they are or what danger they pose," she told the Commons.

"Government inaction and delay has caused the building safety crisis to spiral. People cannot continue to live in unsafe, un-sellable homes. Home-owners shouldn't face bankruptcy to fix a problem they didn't cause.

"Unfortunately, these proposals will still leave too many people struggling and facing loans instead of being given justice."

The party has previously claimed up to 11 million people are at risk from life-changing costs and unsellable properties amid the cladding crisis.

Deputy leader Angela Rayner tweeted: "Leaseholders should not and must not pay for the cladding crisis that was caused by dodgy developers, cowboy builders and manufacturers of flammable cladding.”

London mayor Sadiq Khan described the plans as "shameful".

"Three and a half years after the Grenfell Tower fire and many leaseholders are still being told to pay for building safety issues they played no part in causing," he said.

"Ministers need to give all leaseholders affected by this crisis the peace of mind they need and deserve."

The End Our Cladding Scandal campaign group said: "The Government promised us no leaseholder would have to pay to make their homes safe. Today we feel betrayed."