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Government will use grant to fund cladding replacement
Funds promised by Theresa May to replace cladding will come in the form of grant, the government has confirmed.
In a statement, the Ministry of Housing, Communities and Local Government (MHCLG) said it would set out the conditions attached to this grant “shortly”, along with details about how councils and housing associations can apply.
The cash will come out of the current Affordable Homes Programme, the next programme in 2021/22 will be boosted by the same amount to compromise.
MHCLG estimated that the cost of the work would come to £400m, but it did not reveal how it had arrived at this estimate.
It is understood building owners which have already started work will still be able to apply for funding.
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Chancellor Philip Hammond said: “We do not want vital safety work to put at risk our high priority house-building programmes. So we have decided to provide funding to ensure that housing associations and councils can carry out this vital work.”
John Clark, chief executive of Plymouth Community Homes, who warned in April that paying for cladding would have a serious knock-on effect on its other capital programmes, said: “It would have been unjust to expect some of the poorest people in society to have to pay for this when there was a national solution available.”
Social landlords have been calling on the government to provide aid for cladding removal for many months.
In August, then-communities secretary Sajid Javid wrote to councils and housing associations saying: “Our expectation is that, as landlords, you will fund measures designed to make a building fire safe and you will draw on your existing resources to do so.”
The government has asked social landlords to provide evidence that the costs of the work would make them unviable before releasing funding. It had previously offered funding flexibility to four councils, but they had not yet received the funding.
Social landlords have previously warned the cost of cladding removal would lead to cuts in house building and development budgets.
John Bibby, chief executive of the Association of Retained Council Housing, said: “I’m not quite sure where the £400m figure has come from. We hope that it’s open to all cladding, and presumably it will be available to those authorities who have already started and paid for the removal work. I also notice that there was no mention of sprinklers.”
Paul Hackett, chief executive of Optivo and chair of the G15 group of large London housing associations added: “I very much hope the funding can cover work that’s already in progress or completed. In Optivo’s case we’ve just got six blocks with ACM cladding and it’s around £600,000 for the total cost.
“We’re absolutely delighted that government recognised they should help housing associations to fund the cost of cladding removal because it’s important that housing association resources are used to continue investing in new supply, and by government providing support for cladding removal means we can carry on with the plans that we had.”
Asked whether money would be made available for private sector blocks, a spokesperson for the Ministry of Housing, Communities and Local Government said: “We have made clear that we want to see private sector landlords follow the lead of the social sector and not pass on the costs of essential cladding replacement to leaseholders.
“We are keeping the situation under review and ministers are meeting industry representatives shortly to discuss this. We have not ruled out any options for ensuring this objective is met.”
