Top Tory Michael Gove has torn up the government’s plan for dealing with cladding – and announced a new one.
The Housing Secretary axed £50-a-month loans for people in “medium-rise” blocks to pay for fixing cladding.
Instead, people in buildings 11-18 metres high will not pay a penny for addressing cladding issues after Grenfell.
But that’s not strictly true. People are still having to pay for waking watches; non-cladding issues aren’t covered by the scheme; and people who’ve already doled out cash won’t get it back.
Mr Gove announced “we will make industry pay” to fix problems for people in leasehold flats.
“Those who manufactured combustible cladding and insulation – many of whom have made vast profits, even at the height of the pandemic – they must pay now instead of leaseholders,” he said.
There will be £27m spent on fire alarms in high-risk buildings; and legal amendments will allow flat owners to get compensation for defects up to 30 years ago (up from 15).
Yet there are questions about what will happen if housing developers try to wriggle out of meeting the bill, as well as when a final package in England will take effect.
Here are nine wrinkles in the small print of the plan.
Other costs are not included
The government announced: “No leaseholder living in their own flat will have to pay a penny to fix unsafe cladding.”
But critics pointed out residents face many other costs while they wait for their cladding issues to be resolved.
MP Clive Efford said residents in one block “have been paying out £28,000 a month for waking watch for nearly four years.”
And others have faced higher-than-usual insurance costs lumped into their service charge.
Mr Gove insisted: “We are making money available to ensure that we can get rid of waking watch, in all save a very few circumstances.”
Non-cladding defects are not included
A leaked letter from the Treasury suggests the plan was not allowed to cover “non-cladding” defects.
This is important because cladding is not the only problem any more on blocks of flats. Stricter fire safety laws mean all sorts of issues can be flagged.
Shadow Housing Secretary Lisa Nandy said leaseholders “face ruinous costs to fix things such as missing fire breaks and defective compartmentation.”
She accused Mr Gove of “abandoning” people with non-cladding safety issues adding: “One cannot make a building half safe.”
Mr Gove insisted legal protection is being improved and he agreed “non-cladding costs do need to be met.”
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Buildings under 11 metres tall are not included
The new guidance means residents in all buildings over 11 metres tall should have their cladding costs covered.
But MP Fleur Anderson raised the case of a building under 11 metres where residents are facing a £1m bill.
While the biggest issues were in taller buildings, there are still some who could be caught out.
Mr Gove admitted: “We require everything to go right in order to be able to help everyone who’s currently facing difficulties.”
“I would not want at this stage to provide an absolute guarantee for people whose specific circumstances I’m not yet familiar with.“
Some people will still face difficult red tape
Mr Gove vowed to “restore common sense to building assessments” by cutting down on the number of “unnecessary” surveys and reports.
There will also be “far greater use of sensible, risk-mitigating fire safety measures such as sprinklers and alarms”.
And the government is withdrawing interim guidance on needing “EWS1” forms – on the external structure of a wall. But there are questions about exactly how many of these forms will be left.
Some fear there could still be run-ins between different companies or agencies disagreeing about what’s needed.
What if those who are told to pay up, don’t?
The government did not say what will happen if developers refuse or fail to meet the bill.
Michael Gove told MPs: “We will give them the chance to do the right thing. I hope that they will take it.
“I can confirm to the House today that if they do not, we will impose a solution on them, if necessary, in law.”
But there are several questions about whether firms will try to avoid paying the bill.
Mr Gove said the “ultimate owners” of a building will be targeted, but there can be complex structures with owners, developers and managers all different entities.
Will the tax threat be empty?
Michael Gove pointed out he has been “authorised” to raise the “prospect” of taxing building firm giants.
But Ms Nandy pointed out a leaked letter from the Treasury.
It showed ministers have warned a decision to impose new taxes is “not a given at this point”.
“It appears what he’s told the public – that tax rises are the backstop – is not what he’s told the Treasury,” she said.
Will Mr Gove be forced to rely on his own department’s housing budgets?
Some fear the policy could ‘rob Peter to pay Paul’ if developers fail to pay and there is no tax either.
The leaked Treasury letter confirmed the Housing Department’s own budget is a “backstop” for the £4bn cost.
And housing select committee chairman Clive Betts raised fears it could harm new social housing.
He said: “If developers don’t pay for the measures in the House today or taxes aren’t raised and there are cuts to his budget as a result, is that going to come off social housing provision as well?
“What assessment has been done for the total impact on future housebuilding for social housing?”
Mr Gove replied only that he would “do everything possible” to avoid an impact on social housing.
How long will we wait?
Mr Gove told MPs: “I will today write to developers to convene a meeting in the next few weeks, and I will report back to the House before Easter.“
His department said the industry had been “given two months to agree to a financial contributions scheme to fund the new plan, otherwise, if necessary, the government will impose a solution in law.”
But he did not give a hard deadline for when a plan or law will actually be finalised, or take effect.
Labour MP for Putney Fleur Anderson asked: “When will the deadline for this chance to do the right thing be up?
“Otherwise we could just be kicking the can down the road. Leaseholders in Putney will want to know when they can expect to be able to sell their homes to move on.”
People won’t get their money back
Some leaseholders have already paid out money to fix issues with their flats.
Yet Mr Gove insisted the government “can’t resolve every issue from the past”.
He added: “I can’t unfortunately… say that we will be in a position to compensate those who have already contributed.
“What we’re seeking to do is to ensure that individuals do not face costs in the future. But again I will work with colleagues across this House in order to try to get to the most equitable position possible.”