How will the Rishi Sunak’s Budget 2021 help victims of the cladding crisis?

Leaseholders take part in a demonstration in London to demand an end to the “cladding scandal” (Harry Scoffin/PA)
PA Media

Rishi Sunak announced £5 billion funding for unsafe cladding removal on the “highest risk buildings” in today’s Budget, more than four years after the Grenfell Tower fire.

The Chancellor’s statement confirmed £1.6 billion initially pledged for removing cladding on high rise buildings, as well as an additional £3.5 billion announced by then-Housing Secretary, Robert Jenrick, in February this year.

This will be funded in part by the Residential Property Developers Tax, a four per cent levy on developers with profits of more than £25 million.

Back in February, David Thomas of Barratt Developments called for a levy on the construction industry to raise the money needed for fire safety improvements.

Will property developer levy stop housebuilding?

But Lawrence Bowles of Savills research department today said the majority of housebuilders would avoid paying the new tax because only 31 developers made enough profit in 2019, the last time building was not disrupted by the pandemic.

He said: “At a time of rising materials and labour costs, and given likely falling transaction volumes next year, it is hard to know what this new levy will raise.

“It is to be hoped it won’t dampen development activity as home building is already projected to continue to undershoot government targets for the next few years.”

There was no detail in the Budget documents of exactly which buildings would now be eligible for the funding.

Previously government funding has only covered the cost of removing cladding from buildings higher than 18 metres. There are estimated to be thousands of homes below that height with potentially lethal cladding.

A long-term loan scheme is planned for leaseholders in these lower rise buildings to pay for removal of cladding but complicated legal framework means any money will not be available for some time to come.

A select committee report last year estimated that repairs to all buildings affected by unsafe cladding would cost a minimum of £15 billion but that remediation could run to £100 billion as more and more building safety issues are uncovered.

Leaseholders in high-risk flats face bills running into the hundreds of thousands for cladding removal and other fire safety improvements as well as sky-high insurance premiums and in some cases, waking watch payments. They are also unable to sell their homes and many cannot afford to move out of potentially deadly flats.

Hilary Benn told the Commons on Tuesday he had heard from a constituent facing a £103,000 bill to fix cladding on their building. The Labour MP for Leeds Central said: “The measures the Government has announced, which I support, are insufficient to bring this nightmare to an end.

“When are we going to see a comprehensive plan to help those leaseholders?”

Putney MP Fleur Anderson said: called on the Government to agree to Labour’s proposal for a “building works agency” aimed at finding problems in unsafe homes, fixing and funding them and then pursuing construction or housing companies for costs.

Housing minister Christopher Pincher said: “She will know that through the building safety fund we have now distributed £734 million to 689 identified buildings.

“Identified by local councils and communities which are best placed to do this, with the result that 65,000 homes are now in the process of being remediated.

“97 per cent of buildings with unsafe ACM cladding have been remediated or are in the process of so being.

“Of course we want to speed up the process, of course we’ll work with developers, with local authorities, with fire and risk assessors to make sure the work is being done.”

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