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The Cladding Crisis and the UK Government’s Five-Point Plan: A Drop in the Ocean?

Almost four years following the Grenfell Tower tragedy on 14 June 2017, the UK Government has finally announced a plan to tackle unsafe cladding in residential buildings across the UK. The obvious question is why has it Read more...

Alex Duncliffe-Vines

Trainee Solicitor

  • Real Estate Finance
  • Real Estate - Commercial & Residential
  • Dispute Resolution

Almost four years following the Grenfell Tower tragedy on 14 June 2017, the UK Government has finally announced a plan to tackle unsafe cladding in residential buildings across the UK.

The obvious question is why has it taken the Government four years to act? However, that is a debate for another day. The focus for now is to understand the proposals and to see whether they go far enough in tackling the widespread cladding crisis.

What is the five-point plan to tackle the cladding crisis?

  1. The UK Government will provide a further £3.5 billion on top of the existing £1.6bn fund to replace unsafe cladding on residential buildings over 18 metres in height in England. The total fund for cladding remediation is £5.1bn.
  1. A loan scheme by the Government for buildings with cladding issues between 11m and 18m in height (four to six storeys tall) will be put in place – these loans will need to be repaid by the leaseholders and are capped at £50 per month for cladding removal.
  1. Two new developer taxes will be instated to provide additional funds for the remedial works:
  • The Gateway 2 Developer Levy – this will be a levy on developers when they seek permission to develop certain high-rise buildings in England. The Housing Minister, Robert Jenrick, has not yet specified the exact details about which type of high-rise buildings will be taxed.
  • A new tax for the UK residential property development sector in 2022 – this tax is expected to yield £2bn over the next decade, at approximately £200m per year to help fund the cladding remediation costs. Details will be subject to Government consultation and will be published for the public in due course.
  1. The introduction of a world-class new safety regime to ensure a tragedy like Grenfell never happens again.
  1. The provision confidence to this part of the housing market, including lenders and surveyors.

Does the plan go far enough?

Mr Jenrick highlights that this is the “largest ever Government investment in building safety” and this news will be welcomed by those who have been impacted by this cladding issue through no fault of their own.

However, it is evident that the measures do not go far enough in terms of solving the widespread cladding crisis and addressing the urgent anxieties of the people living within buildings subject to dangerous cladding. The (House of Commons backbench) Housing, Communities & Local Government Committee has estimated the cost to be almost £15bn.

The £5bn fund is only available to those buildings over 18m in height. The application of this is extremely limited as ACM cladding issues are widespread. Jane Duncan, chair of RIBA’s fire safety expert panel, confirmed this when she stated that ‘fire does not discriminate by height’.

Mr Jenrick describes the finance scheme for those leaseholders living in buildings between 11m and 18m in height as “very generous”, but unfortunately, these proposals mean that thousands will have to cover the expensive remediation bills they played no part in causing. For example, if the total bill per flat was £30,000, it would take somebody 50 years to pay the bill off. One should also be mindful that the recent flat blaze at The Cube in Bolton, which was below 18m, burnt just as quickly as Grenfell.

The Government have not provided any clarity in respect of the buildings under 11m in height, causing further confusion and stress to those leaseholders residing in these buildings.

The measures only refer to “unsafe cladding” and this is just one of the problems. The fund and the five-point plan fail to account for the cost of other important fire safety measures such as fire safety defects, smoke ventilation systems, incorrectly installed cavity fire breaks and flammable insulation within the buildings.

Final Thoughts

The announcement by the Government on the issue of dangerous cladding is welcome. Although it has taken a considerable amount of time, a plan is now finally in place to tackle the cladding crisis, which is better than no plan. However, there is a long road ahead for Mr Jenrick and for the Government to provide answers and solutions to the many issues that remain unresolved in this crisis of housing safety.

If you would like to discuss any of the topics raised in the above article, please call us on +44 (0)20 7936 8888, email on enquiries@lawstep.co.uk or contact a member of the team below.

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