Councils ‘face struggle’ to reclaim private cladding costs

Councils ‘face struggle’ to reclaim private cladding costs

DESPITE THE government giving councils more powers to recoup costs from private building owners with relation to removing flammable cladding, campaigners believe they will struggle to do this.

In a release last week, the government confirmed the ban that it had announced in the summer on combustible material use in new high rise buildings, with regulations laid out in parliament today that will ‘give legal effect’ to the ban. Combustible materials will not be permitted on external walls of new buildings 18m tall or higher that contain flats, hospitals, residential care premises, boarding school dormitories or student accommodation.

Schools that are over 18m in height and built as part of the government’s centrally delivered build programmes will also not use combustible materials on external walls. Communities and Housing Secretary James Brokenshire also announced that he was ‘taking action to speed up’ replacement of aluminium composite material (ACM) cladding.

On this note, he stated that local authorities ‘will get the government’s full backing’, including financial support ‘if necessary’, to enable them to carry out emergency work on affected private residential buildings. The government will recover the costs from building owners, and in turn allow buildings ‘to be made permanently safe without delay’, as it is already fully funding ACM replacement on social housing high rises 18m or higher.

However, Financial Times reported on the views of campaigners, who have warned that the government expects councils to ‘try to recoup’ costs for recladding privately owned buildings from their freeholders, though these offshore funds ‘are unlikely to play’. The government’s position was that councils had its ‘full backing, including financial support if necessary’, but said that councils’ will recover the costs from building owners’, with no specific funding amount said to have been made available.

Martin Boyd, trustee of campaign group the Leasehold Knowledge Partnership, stated that ‘the government’s approach seems fundamentally flawed in allowing the developer to absolve themselves of something which can only be the responsibility of the developer or the government’. He added that this would mean councils would struggle to recover costs as freeholders are ‘often little more than a piece of paper sitting in a drawer somewhere in an offshore office in Jersey’.

While noting that leasehold law enables freeholders to recover maintenance costs from leaseholders, it ‘does not provide a route by which leaseholders can compel a freeholder to pay’, with ground rents offering a ‘relatively small income stream’, and investors buying assets ‘for a fraction’ of the huge cost of recladding.

In turn, Susan Bright, professor of land law at Oxford University, stated that ‘it is not clear why all freeholders, particularly if not the developer or original owner, should have to pay’, adding that ‘we are talking about a problem caused by a systemic failure in fire safety regulation and construction methods and standards’. With Housing Act powers, she noted that councils can assess building exteriors for fire hazards and take enforcement action.

On this point, a source familiar with the plans said that the government ‘may hope the threat of such action will prompt developers or freeholders to pay’ for works. Ms Bright further noted: ‘There remain important details that need to be fleshed out, particularly in relation to funding. It may be that the government needs to supply the money that austerity-hit local authorities simply do not have, even if this is on a long-term loan basis.’