The decision by the government to provide £200m to fund the removal of Grenfell-style cladding from private residential blocks across the country will not be “repeated in other circumstances”, the housing secretary’s chief civil servant has said.
In a letter written to the housing secretary James Brokenshire, Melanie Dawes, permanent secretary of the Ministry of Housing, Communities and Local Government (MHCLG), wrote that the grant fund for the remediation of aluminium composite material (ACM) cladding failed the government’s ‘managing public money’ test, and that the secretary of state “should be clear” that it will not be repeated again.
As MHCLG permanent secretary, Ms Dawes is Mr Brokenshire’s chief advisor in the civil service, and is responsible for the day-to-day running of the department, including overseeing its budget.
The letter was sent to Mr Brokenshire just a day before he announced that the government would create a £200m fund to pay for the removal of ACM cladding from private blocks.
Campaigners behind the End Our Cladding Scandal Campaign, which is being run with Inside Housing, welcomed the decision but called for additional funds to cover blocks with non-ACM cladding deemed dangerous and in need of removal.
In the letter, Ms Dawes said that while the £400m fund to pay for the removal of ACM cladding from social housing blocks met the government’s ‘managing public money’ rules, a fund for private blocks did not.
She wrote: “A fund to support leaseholders involves the transfer of money from the general taxpayer to private individuals and companies, and the government’s Green Book showed that the public benefit did not outweigh the costs of the transfer.”
The letter added that the distributional impact was “likely to be regressive” as, on average, the income of those living in the blocks was higher than that of the general population.
However, Mr Brokenshire overruled the advice, making a “formal direction” to create the fund on Wednesday.
In a response to Ms Dawes sent on the same day, Mr Brokenshire wrote that while he was aware that the taxpayer funding did not meet ‘managing public money’ principles, the safety implications for people living in the blocks was more important. Mr Brokenshire confirmed yesterday that the money would be taken from existing MHCLG budgets.
A total of 176 private residential blocks have been found to be clad in dangerous Grenfell-style ACM cladding since the fire in west London, which killed 72 people.
However, despite it being nearly two years since the Grenfell Tower tragedy, only 10 blocks have had their cladding fully removed.
The letter revealed that on 118 blocks, plans were in place to carry out work but progress was slow, while on a further 36 blocks the building owners had flatly refused to remediate.
It was also revealed in the letter from Ms Dawes that the government had explored a number of different options to increase the pace of remediation, including setting up a loan system for freeholders.
However, it was decided that this would not be effective as it would ultimately leave leaseholders liable for the costs.
Other options explored were means-tested grants for freeholders and “more interventionist approaches” such as legislating to protect existing leaseholders.
It was found that changes to legislation would “raise significant concerns in terms of property rights” and “wouldn’t necessarily lower the costs for the exchequer”.
As part of the announcement of the £200m fund yesterday, Mr Brokenshire said that building owners could only access the fund with the condition that they try to recoup funds from those responsible for installing the cladding.
Building owners will be able to register their interest in receiving government cash in early July, and will only be given money if they promise to begin work within three months.