Building safety remedial works and funding: Michael Gove’s review

There is nothing more important to housing associations than the safety of their residents, and necessary building safety remedial works are priority for housing associations affected by the cladding crisis. Housing associations across the country have been assessing their buildings for safety risks and take urgent action where required. The estimated cost to the housing association sector of making buildings of all heights safe could exceed £10bn.

We have consistently called for government to provide upfront funding for all remedial works for all buildings that need them, regardless of whether leaseholders or social housing tenants live in them, and recoup the costs from those responsible later. We included this call in our Spending Review and Autumn Budget submission, but the government did not provide any new funding in this area, and only reiterated funding for remedial works to external walls of buildings 18m and over, and only for leaseholders’ share of costs.

Since then, the new Secretary of State for Levelling Up, Housing and Communities, Michael Gove MP, has stated his commitment to building safety and confirmed that he is reviewing his Department’s policies. On November 8, giving evidence in front of the Housing, Communities and Local Government Select Committee, he acknowledged that a “disproportionate” level of financial responsibility has been placed on innocent parties, that he does not think leaseholders should have to pay for remedial works to their buildings, and that he supports the principle of the ‘polluter’ paying to make buildings safe.

We are expecting Michael Gove to provide further insight before Parliament rises on 17 December. Media reports suggest that the government may provide further funding for remedial works to buildings under 18m and play a greater role in prioritising buildings for works according to risk.

A change in government guidance

We understand from our members that the government could provide greater certainty to your own building safety programmes by withdrawing its existing guidance, which has already been committed to. We understand from officials that the consolidated advice note, issued in January 2020 setting out government’s expectations for managing risks in multi-storey, multi-occupancy buildings of all heights, is still on track to be withdrawn before the end the year. We also hear that it is the government’s intention to withdraw this once the PAS 9980, a piece of industry-led guidance on the assessment and appraisal of external wall systems, is ready for publication.

Financial support for leaseholders in buildings under 18m

At the Housing, Communities and Local Government Select Committee, Gove said that he would pause plans for leaseholders in buildings under 18m to pay for remedial works to external wall systems via a loan scheme, due to the unfairness of leaseholders having to pay for remedial works while those responsible continue to trade.

As stated above, there are media reports that the government is considering extending the Building Safety Fund to cover costs of remedial works in buildings under 18m, where these would otherwise have been passed to leaseholders. Given the government’s view that safety risks in buildings below 18m could be mitigated, as opposed to requiring remedial works, it is our assumption that any additional funding for buildings of this height will be subject to scrutiny as to whether mitigation measures have been appropriately considered.

We will continue to engage with DLUHC to ensure housing associations’ views and those of their leaseholders are represented.

Building Safety Fund

It was announced earlier in the year that the Building Safety Fund will reopen for further applications, but the government has not yet announced a date for this. We expect the Fund to continue to only be made available for leaseholders’ costs relating to works in external wall systems. As highlighted above, it has been reported that the Fund could also be opened for applications for works to buildings under 18m where these are necessary.

Housing associations also have a role to play to release money from this fund for buildings they don’t own or manage, but in which they have residents. Housing associations in this situation will need to sign a SPEI, Services of Public Economic Interest agreement to release funds for leaseholders’ share of remedial works.

Ahead of the Spending Review and Autumn Budget, we published research that found that more than one in 10 new affordable homes can no longer be built due to the costs of making buildings safe. At his appearance in front of the Select Committee, Gove noted the “well documented” challenges facing housing associations with large remediation costs, and the knock-on impact this will have on investment in the supply of new affordable homes. We have been consistently raising this point with the government, and it is useful for this to be acknowledged by the Secretary of State while speaking to a committee of MPs.

As the Building Safety Bill makes its way through Parliament, we will continue to raise housing associations’ experiences and challenges relating to building safety.