Seventh Report - Building Safety: Remediation and Funding

The government recognises the negative effect of the building safety crisis on residents' mental health and is working to ensure people get the help and support they need.

The government redirects responsibility for PAS guidance to the British Standards Institution and states it will publish its response to the PEEPs consultation alongside the commencement of the Fire Safety Act 2021 in May 2022.

The government has rejected the recommendation to scrap the cap on non-cladding costs for leaseholders, citing existing protections for leaseholders.

The government extended the number of protected properties from two to three, meaning leaseholders living in their own home and those with up to three UK properties in total will be protected; all leaseholders will be protected where the building owner is connected to the developer.

The government rejects the recommendation for a Comprehensive Building Safety Fund, stating it would drive unnecessary remediation works and negatively impact the housing market and does not agree that overseas building owners should not be eligible for remediation funding.

The government states it is committed to publishing information in data releases as soon as it is appropriate to do so and currently publishes monthly data on progress with remediation of unsafe ACM cladding, quarterly updates on Building Safety Fund funding, and monthly data related to the Building Safety Fund.

The government agrees that those responsible should contribute to remediation costs and will hold construction product manufacturers accountable, using powers in the Building Safety Act and pursuing firms through the courts. They will continue to fund cladding remediation through the Building Safety Fund for buildings above 18 metres and provide funding for 11-18 metre cladding removal through the building safety levy.

The government rejects the recommendation to remove VAT on building safety activity, stating that the supply of fire safety equipment is already eligible for VAT relief and that there is no guarantee savings would be passed on to leaseholders and that tax policy is a matter for HM Treasury Ministers.

The government has asked the FCA and CMA to review buildings insurance premiums for medium and high-rise blocks of flats and is awaiting their recommendations.

The government states they are already engaging with overseas developers and firms to provide a funded solution for the remediation of unsafe cladding. They also point to the powers in the Building Safety Act 2022 that allow the Secretary of State to prohibit developers from commencing new development or obtaining building control sign-off, regardless of ownership structures, and the High Court's power to apply a Building Liability Order to a company based overseas.

The government states that this information has not been collected systematically and the department does not have plans to collect it from leaseholders.

The government will not repay leaseholders for work already undertaken, but states that the Building Safety Act makes it a legal requirement for building owners to exhaust all other routes to fund essential building safety work before passing costs onto leaseholders. It states that caps for leaseholder contributions to non-cladding costs will take into account costs that leaseholders have already incurred.

The Government states that social housing providers have access to the £400m Social Sector ACM Cladding Remediation Fund and were eligible for the Building Safety Fund for other combustible cladding types and can submit claims to the Building Safety Fund for the proportion of eligible works which would otherwise be chargeable to residential leaseholders.

The Government is confident that funding from industry will cover the cost of remediation of unsafe cladding in buildings between 11-18 metres and will not be required to provide additional funding beyond that which it has already committed.

The government is committed to a state-backed professional indemnity insurance scheme for EWS1 assessors, is assessing the fire risk assessor market, and has funded RICS to train assessors; but does not directly commit to monitoring and reporting back to the committee on the impact of PAS 9980 or the number of qualified fire risk assessors.

The government rejects the recommendation, stating that the Responsible Person under the Fire Safety Order should determine the need and timing of fire risk assessments. The Building Safety Regulator will focus on higher-risk buildings and will assess safety risks including the spread of fire.