'Operating in a time warp': Ministers accused of recycling cladding fund pledge

Hundreds of thousands of homeowners have been told their properties are unsafe after the Grenfell Tower tragedy. Credit: PA
  • By Westminster Producer Lewis Denison

The government has been accused of "operating in a time warp" by cladding campaigners who say the same funding announcement has been made on four separate occasions.

Chancellor Rishi Sunak, in his 2021 Budget, told MPs he was investing £5 billion to remove unsafe cladding from the highest-risk buildings, after hundreds of thousands of homeowners were told their properties were unsafe following regulation changes after the Grenfell Tower tragedy.

ITV News has spoken to one first-time buyer who was landed with a £208,000 bill to remedy the flat that she paid £230,000 for just one month before the Grenfell fire - many more have received bills above £100,000.

To reduce the impact to leaseholders, the government announced in May last year a £1 billion building safety fund to remove dangerous cladding from high rise buildings - that was increased to £5 billion amid pleas from those affected that the previous support was not enough.

Mr Sunak confirmed that £2 billion in cash support would be raised through a levy on property developers, with profits over £25 million to be taxed at 4% to help fill the £5 billion pot.

Chancellor Rishi Sunak’s tax hikes are adding to soaring costs for households and firms Credit: Victoria Jones/PA

Campaigners say the £5 billion fund is not enough to remedy the hundreds of thousands of high rise properties that need cladding removed and does nothing to support homeowners in buildings shorter than 18 metres high, which are not eligible for government grants.

End Our Cladding Scandal, a campaign group run by impacted leaseholders, said despite the funding "ultimately it will be homeowners who will be left to pick up the can".

In a statement, the group said: "Boris Johnson’s government seems to be operating in a time warp. Today’s Budget marks the fourth time that Ministers have recycled their announcement of a £5 billion commitment to help fix defective buildings affected by the cladding scandal."

"This £2 billion developer tax spread over ten years may sound like a lot until you realise that the estimates to fix this crisis could be between £15 billion and £50 billion – and that ultimately it will be homeowners who will be left to pick up the can."

End our Cladding Scandal wants the government to either fully cover the cost of remediation works, or to force the developers who built the buildings to pay for it.

The group says the 4% levy is nothing more than a "slap on the wrist for developers", who they say have been able to escape the financial cost of removing unsafe cladding.

It says the government appears "totally content for hard-working, tax-paying leaseholders to shoulder most of the burden".

The group added: "We have already witnessed the start of bankruptcy filings and repossessions, not to mention warnings from the Bank of England and the mental health crisis brought about by the stress of financial ruin and living in flammable flats.

"It’s time for this government to end a scandal that is ruining so many lives."

ITV News has contacted the government for a response.

Mary-Anne Bowring, managing director at the property management consultancy Ringley Group, said: "A blanket tax on developers is fairer than leaving leaseholders to shoulder the burden but it is still a blunt instrument to use to fix the cladding crisis.

"Fundamentally, accountability should fall squarely on those who overlooked the potential hazards of unsafe cladding in the first place."

Campaigners are desperate for the government to improve support for homeowners with unsafe cladding on their properties. Credit: PA

The chancellor also announced £11.5 billion to build up to 180,000 affordable homes and an extra £1.8 billion to bring 1,500 hectares of brownfield land into use.

James Forrester, the managing director of estate agent Barrows and Forrester, said: "Time and time again we've seen the government pledge to fix the housing market using recycled rhetoric and funding from previously announced initiatives.

"Today was no different and, reading between the lines, we can expect to see them continue to over-promise and under-deliver in their attempts to address the housing crisis.

"While Boris Johnson might not be a fan of recycling, his chancellor certainly is, and so the 180,000 new homes pledged today is certainly no step forward."

"The only bone thrown to a nation of ravenous homebuyers starved of housing stock has been a scrap of properties built on brownfield sites."