In the interests of transparency, I declare that my husband owns a flat that may potentially be affected by this issue.
This has been a very interesting estimates day debate on building safety. The cladding crisis, about which we have heard much in the debate, has made a mockery of the aspiration of a property-owning democracy, as families and young professionals find themselves literally trapped in unsafe buildings as they face life-changing bills to remove cladding that they had no say in installing. I know that the Minister will be keen to point out the £5.1 billion that his Department has announced to remediate this issue, but it is becoming clear with every speaker and every day that passes that this will fall woefully short of what is required to address this issue fully.
At this juncture, I congratulate The Sunday Times on its excellent campaigning on this issue and on showing the human cost to this crisis, because it is not about cladding. It is about people, and it is about families whose lives have been put on hold and whose plans to start or add to their families have been put on hold indefinitely—people facing eviction notices, people whose mental health has been adversely affected, and people who feel suicidal because they look to the future and cannot see a way out of a crisis that is not of their own making.
The Association of Residential Managing Agents and the Institute of Residential Property Management have published new data that looked at more than 750 buildings, concluding that leaseholders must still pay impossible sums of £20,000 each to fix smaller blocks, and more than £14,000 for unfunded fire risks in tall buildings. Although a fifth of those affected were contemplating bankruptcy, 23% had taken out loans. What is clear is that not enough due diligence has been done by the Government on the true costs of remediation; they seem to have reckoned the costs on the basis of guesswork. However, the real costs are now being revealed to those affected. The financial costs are life-changing; the human cost is incalculable.
The Government have said that their £5.1 billion fund covers only buildings that are taller than 18 metres or six storeys, with a 30 cm tolerance, because they wanted to prioritise unsafe cladding that was a greater risk in taller blocks. However, The Sunday Times reports that a key civil servant was recorded telling fire engineers that 18 metres was the cut-off point because the Government
“haven’t got time to come up with a better number.”
We are now seeing the reality for those who live in blocks that do not reach the 18-metre threshold. They face bills for stripping flammable cladding from their flats, which costs more than the flats themselves. As for those applying for a state loan to help cover costs, about which we have heard much this afternoon, leaked letters from the Ministry of Housing, Communities and Local Government and the Treasury show that, under the plans, loans will be low-interest—they will not be interest-free—and that, at an annual rate of 1%, the interest alone on a £100,000 loan would cost £80 per month, which means that the loan would never be repaid but would grow over time, making such flats even harder to sell. In any case, it seems that the state loans, which were announced in February, will not be launched for at least another two years.
Additionally, there is the complication of flammable insulation, flammable balconies and faulty cavity barriers. There is no funding for those building dangers, despite the fact that properties cannot be sold, or even insured for a reasonable cost, until the remediation work is carried out. Will the Minister explain why those particular areas were not included in the funding? What is clear is that more urgent and direct Government intervention is needed. The Barnett consequentials in Scotland—£97.1 million to address the cladding issue—are woefully inadequate, just as the sums allocated in England are inadequate. Remediation of cladding must not be left to householders and leaseholders. With eye-watering bills, they cannot afford to remove materials for which they have no responsibility.
Following the publication of the recommendations from the ministerial working group on mortgage lending and cladding, property owners in Scotland who live in buildings where safety concerns had been determined submitted an expression of interest in participating in the first phase of the single building assessment. Over 300 expressions of interest were submitted. The selection of the buildings to be included in the first phase has been completed, and building owners are currently being notified.
The single building assessment will provide clear evidence of the total need for remediation. All flatted properties will be covered: 770 high-rise buildings and many more at lower heights. This approach allows the Scottish Government to identify buildings that are at risk. If no risk is identified, that will release people from safety and mortgage-lending concerns; it may also save home owners the hundreds of pounds that they might otherwise have faced paying for an individual external wall fire review form. The cost of the single building assessment will be met by the Scottish Government. Once it has been established, remediation can be targeted at the buildings most at risk.
It is also important to have a holistic approach and learn the lessons of the past about the use of sprinklers and interconnected fire alarms, which are important for managing risks and potential fire outbreaks. This process must ensure that support is delivered fairly and that remediation is delivered on a level playing field so that the risk of people being left out—as we know happened in England under the first support scheme—does not arise in Scotland.
In addition, there are ongoing concerns about extortionate building insurance costs. The Secretary of State is aware of them: he said on
“as with the lenders, the insurers are faced with assessing a new and heightened level of risk. None the less the Association of British Insurers now needs to step up and take a proportionate risk-based approach...Insurers should be pricing that risk correctly and not passing on those costs or even profiteering”.—[Official Report,
Will the Minister update the House on the matter? Anecdotally, we have all heard about householders receiving letters telling them that their insurance is to be terminated or that its cost will be raised so dramatically that it becomes unaffordable overnight. The Secretary of State said in February that the Government were prepared to step in as a last resort if engagement with the insurance industry did not improve matters. Is that still the case? If so, how bad do matters have to become before the Government step in?
We need more funding. That cannot be said too often, because the sums set aside are simply not adequate to the task at hand. The Housing, Communities and Local Government Committee indicated as much in the report that it published in April, putting the full cost of fire safety remediation at up to £15 billion and calling for the establishment of a comprehensive building safety fund to cover the cost of all remediation works on buildings of any height, to be fully funded by Government and the industry. As my hon. Friend Deidre Brock pointed out, it is really important that the industry takes its responsibility on the issue seriously. That sounds eminently sensible, and I hope that the Government’s response to the Committee’s report is positive; I know that it is due to be published soon.
I say to the Minister that this is one of the great scandals of our generation. How much misery do those affected have to go through before there is a fair and comprehensive solution to this crisis? When will sufficient funding be made available so that all who have been conned by poor cladding, flammable insulation and faulty cavity barriers can access the level of support that they need so that they can just get on with their lives?