£9bn cladding black hole
As MPs vote down a Bill to protect leaseholders from huge fire safety costs, how desperate property owners are now staring into a . . .
BRITAIN’S cladding crisis faces a £9billion black hole despite developers vowing to pay £400 million to fix faulty buildings, a Daily Mail audit reveals. The money promised by one construction giant could cover as little as 13pc of the total bill faced by its leaseholders, leaving scores of homeowners facing shock bills for thousands of pounds.
Multi-million pound firms have repeatedly refused to say how many of their buildings require costly repairs, making it impossible to tell if their funds are adequate. Others are refusing to cover costs for blocks they built but no longer own.
Hundreds of thousands of leaseholders are stuck in unsafe flats after the Grenfell disaster exposed deadly safety flaws.
In Scotland, it has been estimated more than 100 council-owned high-rise blocks have potentially deadly cladding.
Grenfell Tower had polyethylene-type ACM panels (ACM-PE), and 23 high-rises north of the Border are reported to have similar cladding. At least 85 other high-rise blocks in Scotland are clad with high-pressure laminate (HPL) panels, which have proved controversial.
MPs estimate it will cost £15billion to resolve the cladding crisis and UK Housing Secretary Robert Jenrick has more than trebled the Government’s funding pot to £5.1 billion, while developers have set aside cash. But it is thought a planned developer tax, that will bring in £2billion over a decade, will be used to claw back the taxpayer’s outlay. Including £400 million set aside by developers, it means there is still £9 billion missing.
Campaigners say the Government fund is a ‘drop in the ocean’ and accuse ministers of allowing developers to get away with ‘token gestures’.
Martin Boyd, chairman of charity Leasehold Knowledge Partnership, believes ministers have been spooked by industry claims that too harsh a levy will hinder their ability to build new homes. But he dismisses this as scaremongering.
Meanwhile, construction giants argue they cannot be held solely responsible. Industry sources claim only 5pc to 8pc of fire-trap flats have been built by big developers, while faults are often down to subcontractors or suppliers. But Mr Boyd says: ‘Car manufacturers buy their bits from subcontractors, but you don’t see Toyota saying: “It’s not really our fault, it’s our brake supplier.” ’
Developers point out that cladding now deemed unsafe complied with regulations at the time. But missing fire breaks and other non-cladding defects have never been allowed. In these cases, firms hide behind the Defective Premises Act, which only gives six years to claim.
The Government is reluctant to remove the onus from the building industry ‘to do the right thing’ by paying upfront in full itself. On Monday, 33 Tory MPs rebelled against Government plans to allow building owners to pass on costs to leaseholders but lost by a majority of 69.
A Government spokesperson says: ‘We are making industry pay for the mistakes of the past with a new levy and tax to contribute to the costs of remediation, backed by £5billion Government funding and a generous capped finance scheme to ensure leaseholders are protected.’
The Scottish Government plans to offer free safety assessments to homeowners whose flats have external cladding to determine which properties have material that should be removed, as part of a £450million package to address the country’s cladding crisis.
The proposal, which paves the way for public funding for remediation, is contained in a report published last week by the Ministerial Working Group on Mortgage Lending and Cladding.
All recommendations have been accepted by the Scottish Government, which has committed to invest all the funding received in consequentials from the UK Government so far to address cladding problems.