You are viewing 1 of your 1 free articles
Salford City Council set to borrow £25m for fire safety works
Salford City Council is set to borrow £25m to cover the cost of fire safety works on nine housing association-managed tower blocks.
Cladding on the blocks – aluminium composite material (ACM) panels with a polyethylene filler, or ACM category 3 – failed an in-depth fire safety test by the Building Research Establishment.
The council will hold a special meeting next Wednesday to decide whether to borrow the cash using its prudential borrowing powers, having concluded the test results mean “significant work” on the blocks will be required, including replacing cladding.
However, it maintains that Pendleton Together, which manages the blocks, should ultimately foot the bill for the works.
The cladding was installed during refurbishment works completed earlier this year through a private finance initiative between the council and Pendleton Together Operating Limited.
READ MORE
“Salford City Council does not accept liability for any defects in respect of the works but is acting to ensure that the best interests and safety of the residents is paramount at all times,” a council officer report reads.
It adds that though “the legal liabilities and responsibilities are likely to be the subject of dispute” the council has decided to take “positive steps” to avoid delaying the works.
The cost of the £25m loan “would be up to £1.25m per year” based on Public Works Loan Board interest rates plus repayments.
This amount would exceed the council’s Housing Revenue Account debt cap or require “significant reductions” in other investment plans if taken from the general fund, according to the report.
And it admits that “as with any funding there would be a risk that, if repayments are not made for any reason, the cost would ultimately sit with the council”.
An £8m fund has already been established to pay for fire safety works on the blocks, with Pendleton Together contributing £3m and the council £5m.
Elsewhere, Oxford City Council has set aside £1m to replace cladding on two of its high rises after samples failed fire safety tests.
Communities secretary Sajid Javid has said the government “will ensure that lack of financial resources” will not stop essential works from going ahead, but that landlords should use “existing resources” to pay.
Salford City Council has requested help with funding from the Department for Communities and Local Government and plans to submit more information on its financial situation.
A spokesperson for Pendleton Together said: “At this moment in time it has yet to be established who will be responsible for funding the refurbishment works, although the work will go ahead because our priority remains ensuring the safety of our residents.
“In the meantime we welcome the pragmatic approach taken by the City Mayor in requesting funds from the City Council to cover the costs of the work.”
Update: at 9.40am on 18.08.17
The story was updated to include more information.
Update: at 11.03am on 18.08.17
The story was updated to include a comment from Pendleton Together.
Update: at 14.35pm on 18.08.17
The article has been updated to provide extra clarity on the body which carried out the tower refurbishment works.
