I want to provide members with an update on the work that the Scottish Government is carrying out to identify and remediate unsafe cladding and, specifically, our single building assessment pilot, which we introduced in 2021.
This has not been an easy process for anyone. The Grenfell tower tragedy shocked us all, and it highlighted that many people could be living in buildings that pose a clear risk to their safety. That risk was never commonly understood by developers, lenders, building insurance firms or even surveyors and fire engineers.
Overcoming that breakdown in shared knowledge and systems about what safety means has been central to our learning, and I will share how we plan to use that learning to help home owners. I understand how stressful and frustrating a time it has been for home owners, and I am grateful to them for their involvement with us. I also want to reassure people that I expect the vast majority of buildings to be found to be safe.
I know that, for many home owners, progress has not been quick enough, but we have to understand the extent of the problem in order to fix it. The purpose and approach of the single building assessment, which was a recommendation of our expert building and fire safety ministerial working group, is to carry out a comprehensive inspection of whole blocks of domestic residential buildings, looking at fire safety and suitability for mortgage lending. That is a free assessment, with no cost to property owners.
Single building assessments—or SBAs—identify what needs to be mitigated or remediated on a building-by-building basis, in line with the most current building standards. That includes the more stringent requirements that were laid last month and that, in effect, ban all combustible cladding on relevant buildings. Our initial approach for the SBA pilot involved giving grants to home owners, typically through an intermediary such as a property factor. Although that approach has worked, it came at a high cost in terms of time and demands, particularly on home owners. The process was slower than we would like, and it is complex. The spend on surveys last year as part of the pilot amounted to £241,000. We have assessed the pilot and have concluded that the method requires to be changed as we scale up to a national programme.
I specifically thank the residents in the 26 buildings who are participating in the pilot surveys and also the home owner associations, factors, and others who have helped to shape the process and our understanding of how best to deliver at scale. I am clear that the pilot has been necessary, but, as I have said, the timescales inherent in the initial method were proving too long and onerous for those who were not familiar with such a technical process.
I can therefore inform the Parliament that I have taken the decision to alter our method to allow us to scale up and expand the programme. Using powers and procurement tools that are available to the Scottish Government, we will now begin offering SBAs directly. That means that the Government will take on the role of procuring surveyors and fire engineers to carry out assessments of buildings. That takes away the burden on home owners or the need for factors to move beyond their traditional role, which is managing common parts. The approach will remove several months from the process of completing a lengthy and technical application, and it will simplify the commissioning of survey work. Importantly, it will allow many more buildings to be brought into the programme at the same time, which will allow us to scale up our programme.
As a result of that change, I can confirm that every block in the pilot that has not yet submitted a full application under the previous approach has been written to with the offer of a directly procured SBA. I also confirm that, from today, we will begin writing to more than 80 unique blocks that submitted an expression of interest last year, in order to invite them on to the programme through a new and simplified application process.
To achieve the increase in pace, I encourage qualified fire engineers and surveyors to be ready to meet the demands of the programme of work. We have already begun the process of placing tenders for single building assessments with public contracts Scotland and we ask people to register and be prepared to bid.
From 2023, we will invite all remaining privately owned high-rise buildings—about another 100 buildings—into the survey programme. We will contact them shortly to explain the timescales and process.
Our programme of surveys is important for today’s home owners and for tomorrow’s, too. As is set out in our programme for government, by the end of this parliamentary session, we will introduce a register of safe buildings. We are already working with the key institutions that will need to have access, such as insurers, mortgage lenders and the fire service, as well as home owners. That measure will help to overcome a key difference between our tenure system and that in the rest of the United Kingdom—the absence of a single building owner. Vitally, it will offer assurance, to those who need it, that a building is safe.
I now turn to the UK Government’s recent announcement on a developer fund. From the start, the Scottish Government has engaged in good faith with the UK Government on its approach to the building safety programme. With my Welsh counterpart, with whom I have worked closely on the issue, I have written a number of times to UK Government ministers. Only last week, I met Lord Greenhalgh to raise my concerns about the way that the UK Government has fallen short when it comes to basic commitments on issues such as collaboration and transparency, after saying from the outset that it wanted a four-nations approach.
Instead, we have had little information and sudden announcements, and those announcements have increasingly focused on fixing problems in England only. It remains the case that the UK Government’s approach of tackling key issues only in England benefits from powers that are available only at a UK level, such as corporation tax, which has been used to tax UK-wide residential property developers.
However, we continue to explore whether any elements of the UK developer fund might still be applicable on a four-nations level, such as extending the scope of any legal agreement that has been entered into between the Department for Levelling Up, Housing and Communities and the big Scottish developers of Scotland’s buildings.
The terrible tragedy of Grenfell tower exposed the risk that many tall buildings might be clad in materials that make the consequences of fire much worse and the cost of remediation huge. I therefore move to the issue of funding. We received £97.1 million in consequentials in 2021-22, and the Government is committed to ensuring that every penny of that and any additional funding that is received for the programme will be invested in assessing buildings and making unsafe buildings safe.
However, further changes in UK Government policy mean that we cannot be 100 per cent sure about what further funding might be received in the future. The UK Government faces the same issues that we do with assessment and remediation, yet the scale of cladding issues in England is not matched by the funding that has been identified or committed by the UK Government. That creates an issue for Scotland, because we get the Barnett consequentials only when the UK Government actually spends the money. By short-changing England, the UK Government is therefore also short-changing the devolved Governments.
We have estimated that we might get associated funding of around £300 million as a share of already committed UK spending on cladding, as is set out in HM Treasury’s spending review, which was published last year. I reiterate that our intention is to spend any associated funding that we receive on assessment, safety and remediation so that we adequately ensure the safety of residents and support home owners over the lifetime of the programme.
Given the complexity and scale of the issue, those resources might not be enough, but that will not prevent us from doing what is right and necessary. We will make our resources go further by working collaboratively with housing developers, the finance industry and home owners in order to fix the issue properly and fully from the outset.
I now turn to our engagement with the house building sector. It has become clear that, even with the possible joint approach with the UK Government on the legal contract behind the pledges, practically, that would impact only on around 12 developers operating in Scotland. That is a fraction of the total, because most of them are small and medium sized. I am therefore pleased to inform Parliament today that Homes for Scotland, the house building members body, has agreed to work with the Scottish Government to develop a Scottish safer buildings accord with its members and the broader sector. Together, we will identify fair and workable solutions for all.
I see no reason why a developer would not commit to doing in Scotland exactly the same as it has agreed to do in England as part of the UK Government’s pledge. Developers must play their part in making unsafe buildings safe, wherever they are. I have met a number of developers in the past few days, and more meetings are to come as we reach out widely to build our accord with those who are affected by unsafe cladding. I am pleased to say that many major developers want to do what is right, and discussions have been co-operative and collaborative.
In the coming weeks, we will work together on the fine detail of the accord and will be involving home owners in that work. It is my clear expectation that, where developers that are linked to buildings with problematic cladding are identified, they will fund remediation. That will ensure that, when public funds need to be spent, we can use them to focus on buildings and works for which a developer cannot be identified or no parent developer exists.
The creation of our accord with the house building sector and home owners will form the basis of a way to address each building’s needs. However, I want to make it clear that, if required, I will make full use of the powers that are available to us to bring parties to the table—including, if necessary, legislation.
I hope that this update has been helpful to members and to those who are affected by the issue. I look forward to continuing to update Parliament as we make further progress with this important programme of work.
The Presiding Officer:
The cabinet secretary will now take questions on the issues that were raised in her statement. I intend to allow around 20 minutes for questions, after which we will move on to the next item of business. Members who wish to ask a question should push their request-to-speak buttons now.
I thank the cabinet secretary for advance sight of her statement.
The Scottish Government began carrying out free single building assessments only in August 2021. We know that, by then, many home owners had already paid for safety assessments out of their own pockets. I will ask a couple of questions with regard to home owners who have been so desperately affected during this time.
What plans do ministers have to cover the costs that have already been incurred for work such as that which the cabinet secretary has announced the Government will cover?
Secondly, home owners who are being prevented from moving or obtaining mortgages due to their flats being covered in potentially combustible cladding are seeing their properties being valued at zero. What discussions has the Government had with the banks, with regard to mortgages, and with the insurance industry, with regard to affordable insurance, for home owners who are in those properties? None of those issues were covered in the cabinet secretary’s statement, but they are really important for property owners.
We will speak to home owners about any payments that they have already made in relation to assessments. I know that officials have already been engaging with some home owners on that. We will continue to do so, because it is important.
Let me be clear about the reason why the single building assessment is so important. It was launched only last summer because a lot of work had gone into addressing the very issues that Miles Briggs describes. That was so that the single building assessment would have the confidence of the sector and of lenders and financial institutions. That is important because we expect that the fact that a single building assessment has been done, with the remediation work being identified, will in itself provide mortgage lenders with confidence that will enable people to move their properties on, if that is what is required. That shows the importance of getting the SBA right and getting it recognised, so that things can go forward.
Many of the issues can be captured in the accord, in order that we can move forward and ensure that home owners are fully briefed and informed.
Miles Briggs also mentioned insurance, which is reserved to the UK Government. However, we have been discussing with the United Kingdom Government the need for insurance issues to be clarified. I have received a letter from Michael Gove just in the past few days, in which he said that the UK Government is hoping to make progress on insurance over the coming months. I know that it is an issue of great concern to people, so I am happy to perhaps arrange a cross-party briefing at which more detailed information on the issues can be gleaned, if that would be helpful.
I am grateful for advance sight of the cabinet secretary’s statement. The pilot has compounded residents’ stress and worry about the safety of their buildings, some of which are currently valued by financial institutions as being worthless. Householders have struggled to find qualified and competent assessors; the Government should have offered a proper service from the start. As happens all too often, Government schemes are set up in such a way that they push work and stress on to householders. The pilot has shown that that approach will not work.
Today, the Government has announced a delay that means that many more householders will have to wait until 2023 for action.
Will the cabinet secretary agree to publish a timetable for the scaling and completion of the work? Will she also agree to publish a quarterly report detailing the numbers of properties assessed, the remediation works completed, and the spending of the £97 million, plus any additional funding, as it is paid out?
I absolutely recognise home owners’ frustrations. I also recognise the technical challenges and difficulties with which home owners and factors have been struggling in the commissioning of reports. That is why my statement announced a move to proactive commissioning of SBAs directly, and to harnessing the skill set that exists in Scotland. That will be tough, because we will need a lot of those skills to be focused on the work if we are to ensure that SBAs can be taken forward at pace.
I am happy to look at setting out more detail on the timetable as far as we can. I mentioned in my statement the initial 80, then 100, buildings. That will get us way down the line of buildings that are affected by prioritising the buildings that are most at risk. I am also happy to furnish Parliament with a quarterly update on the numbers. I think that we will see over the next year a ramping up of the number of SBAs being completed. Then, of course, the remediation work will scale up.
I should also say that a lot of the buildings that are assessed through the SBA process will be found to be safe. That, in itself, will be important for the home owners.
I am happy to work with Mark Griffin. If he would find it to be of benefit and help to have a more detailed briefing on technical detail, I can offer to arrange that on a cross-party basis.
I thank the cabinet secretary for the statement and would welcome a cross-party briefing on the details.
I am concerned that, despite assurances from the UK Government that the four nations would work closely together to tackle building safety issues, the interests of the devolved nations are being ignored. Does the cabinet secretary believe that the UK Government is no longer interested in co-ordination when it comes to cladding remediation? If so, how should the Scottish Government proceed?
Along with our Welsh colleagues, we have continually called for a joined-up four-nations approach to the issue. We thought that that would be the simplest way to move forward, given the complexity. However, a few weeks ago, the UK Government moved to what is clearly an England-only approach, despite matters such as insurance, mortgage lending and corporation tax clearly being reserved and playing a major part in the solution.
For that reason, co-ordination between the nations would be a better way forward—primarily for home owners, but also for developers. We will continue to pursue that approach with our Welsh counterparts. A four-nations meeting on building safety is due to take place later this month, at which we and our Welsh colleagues will continue to pursue those matters.
However, part of the reason for my statement and the announcement of the accord was the need to be realistic. It looks as though the UK Government is going in a particular direction of travel, which is why we have to progress and plan our own way forward to ensure that we are doing the best by property owners when it comes to cladding remediation. The accord will be the forum in which to take that forward.
Individuals who have bought flats with flammable cladding have found themselves in an unfortunate situation, with the value of their properties plummeting and insurance costs rising.
The cabinet secretary indicated in her statement that the Scottish Government is committed to ensuring that every penny of additional funding that is received will be invested in assessing buildings and making them safe. Does the cabinet secretary recognise that more might be required to support the individuals who are affected by the cladding crisis? What steps will the Scottish Government take to ensure that?
I thank Alexander Stewart for the question. As I said earlier, the UK Government has contracted with an insurance underwriter to back the provision of a UK-wide professional indemnity insurance scheme. There has been some delay in that, but it will provide PII for fire risk assessors across the UK, which will help to move things forward.
However, we believe that the insurance for home owners issue continues to be best addressed at UK level because of the UK-wide nature of insurance institutions. I am happy to keep Alexander Stewart and others apprised of discussions about that.
All the money that we receive in consequentials will be spent on that—every penny—but we have to spend the money wisely, which is why I was clear in my statement that I expect developers, where they can be linked to a building, to remediate the cost of that building. We want it to be done under the single building assessment so that it is done properly, once and to a standard that meets all the current requirements. That is important for home owners’ assurance.
Will more money be required? Yes, it will. Obviously, the UK Government announced the building safety levy a couple of weeks ago. That is an England-only levy that will be levied through local government. We will need to look at what equivalent we need to use here to bridge any gap, because we will spend the public money on buildings for which no developer can be found. Those home owners must get the same treatment, so we want to give assurance that we will focus the public money on them. We will have to work through the Scottish safer buildings accord
The expansion of the single building assessment pilot programme has resulted in properties in my constituency now being included, which was welcomed by affected constituents in Dundee City West. However, uncertain finances could undermine progress with the SBA. Can the cabinet secretary say more about discussions with the UK Government on consequentials? It is important that we ensure that the level of funding is sufficient to support the needs of the work that is required across Scotland.
I was pleased to be able to support the expansion of the pilot, and I announced today that our programme will tackle the most complex buildings, increase the number of properties in the programme and remove the burden from home owners. I know that that will be of particular importance to Joe FitzPatrick and some of his constituents.
In the statement, I said that the UK Government has moved away from the work being Treasury funded and is driving towards a mixture of funding that comes through corporation tax on developers and the building safety levy. That is quite a complicated landscape of funding.
After quite a lot of digging and going backwards and forwards, we have been able to identify the additional £300 million through consequentials. It is hard to find out how much of that is related to corporation tax money raised and how much is from the Treasury. It is very difficult to define the amount. One principle that needs to be clear is that Scotland, Wales and Northern Ireland should get their fair share of any money that is raised through corporation tax at UK level.
As I said in answer to an earlier question, we then have to find our own mechanism to bridge any gaps that we identify. The building safety levy is what is being used down south, but we will have to find an equivalent for Scotland, because that levy will not generate any consequentials for Scotland, Wales or Northern Ireland. We will have to fill the gap ourselves.
I have written to the minister on many occasions about my constituents in Glasgow who welcome the fact that they have been prioritised for the single building assessment. Other constituents will have to wait until 2023. In both cases, my constituents can still not get adequate buildings insurance, which is quite dangerous.
In view of that, will the Scottish Government consider indemnifying those owners—standing behind them—while we wait for the final outcome? If the minister is confident that we will get to that point, the Scottish Government should not find that too risky.
I am happy to continue to discuss all these issues with Pauline McNeill. The accord will give us a forum in which not just developers but home owners will be able to look at what more we can do in the here and now. Clearly, the issue of insurance is complicated, but the good thing about the single building assessment is that, because it has been worked through with so many critical institutions, it will have the confidence of those institutions. The point at which the SBA is completed could be really important in resolving some of these matters, rather than having to wait for the remediation works to be completed. That in itself could perhaps give home owners a bit of confidence that the SBA process will unlock doors for them. I am happy to keep Pauline McNeill informed about discussions as we take them forward.
Developers should, absolutely, be expected to remediate cladding on buildings that they have built, but what support is available to home owners for whose homes there is now no developer because they have stopped trading? How will the Scottish Government ensure that such buildings are assessed for any problems that have been identified or fully fixed and that there is no burden on home owners who are in need of assistance?
I agree that developers must take responsibility and remediate buildings that they have built and are associated with. My approach is to ensure that, in the interest of home owners, we work in a positive way with developers on the matter. I expect to take that forward through the Scottish safer buildings accord.
As I said in my statement, that approach means that the public funds that we have available can be prioritised for the very buildings and works that Jackie Dunbar talks about—those without a linked developer—so that home owners are assisted in every way possible. That is the best way to make maximum use of the collective pot of money.
We are five years on from Grenfell, so it is really disappointing that the minister has come to the chamber today to declare, after a year of the pilot being in place, that it has taken too long and is onerous. Home owners have been aware of that—it has been blindingly obvious for a long time, as we have seen from the evidence that they have provided—so why has it taken so long for the Government to admit that the pilot is failing? The minister talks about using powers to compel developers and other parties to come to the table. What powers are those, and how will they be deployed?
I do not believe that the pilot has not been a success—it has been a success in being able to test out the single building assessment. The problem has been the way in which single building assessments have been commissioned, which has been shown to be too complex and onerous for home owners and factors. That is what we have learned, which is why we are switching to a commission basis.
However, the basis of the pilot and the single building assessment is absolutely sound. The SBA will help to identify those buildings that are safe and can be given the green light, which is good. It will also identify those buildings that require remediation and what that remediation is, and will ensure that work is done to a high standard—and done once only. It will ensure that the developers that are associated with those buildings pay for and get on and do that work, and that we can support the home owners in buildings for which no developer can be found.
On Willie Rennie’s final point, from the discussions that I have had with developers, I have every faith that they want to do the right thing. Every one of them that I have spoken to wants to do the right thing. I said at the end of my statement that, if some do not want to come to the table, we will look at using the powers that are at our disposal to compel them to do so, and we will consider legislating to do that if we need to. However, I do not think that we will need to do that because developers want to be seen to be doing the right thing and fulfilling their responsibilities. As I say, I will keep the Parliament updated on those matters as we go forward.
Yes, they are, although it does not make it easy for anybody in this situation. It is important that developers recognise that, even though the UK Government is having an England-only focus, many of the developers are UK-wide organisations and their responsibility is to Scotland, Wales and Northern Ireland as well as to England. So far, the discussions that I have had in that space have been very positive.
I thank the cabinet secretary for advance sight of her statement. Changes to building regulations secured by Green minister Patrick Harvie mean that combustible cladding can no longer be used on high-rise buildings, but remediation of existing buildings must be done urgently.
What are the cabinet secretary’s thoughts on a safe building assessment, or an MOT for buildings in Scotland coming forward in future so that we understand the components of construction and can make sure that things are fitting properly?
Ariane Burgess is quite right that we have recently passed building standards on this issue, but they build on what were quite robust building regulations and standards that go back as far as 2005. It is important to say that.
The safe buildings register that we have talked about and are committed to will be important for home owners and for the institutions that we have talked about in terms of mortgages and insurance. As Ariane Burgess has noted, we have committed to taking that forward.
The UK Government’s move from the building safety fund to a pledge letter in England clearly has impacts in Scotland. Did the Scottish Government have advance sight of the April announcement? Can the cabinet secretary advise whether the work on the accord that she outlined, which has been carried out since the UK Government’s announcement, will cause any issues for the planned roll-out of the cladding remediation programme?
No, neither we nor the Welsh had any sight of the announcements that were made. They took us by surprise because, until that point, we had assumed that the work was being done on a four-nations basis, particularly around the levy. However, we are where we are, and we are determined to make sure that we look to what we can do here in Scotland.
We will continue to work closely with Wales; we have a good working relationship there. We also have the four-nations building safety summit, if you like, that is taking place later this month, at which we will continue to pursue areas in which we might still be able to work together. Essentially, however, we will have to find some of the solutions ourselves.
Annie Wells raises a number of issues. We have said on a number of occasions that we will support and work with public bodies and health boards to understand their current estates and to make sure that they have done detailed assessments and that any issues are resolved. Where issues are found, we will support those organisations with the technical expertise that they need to assess and remediate matters as soon as possible.
I will be happy to write to Annie Wells with an update on the particular buildings that she cited.