RDC0005

Written evidence submitted by Homes England

Introduction

Homes England welcomes the opportunity to provide written evidence to the Public Accounts Committee as part of its inquiry looking at ‘Progress in Remediating Dangerous Cladding’.

Homes England is the Government’s housing accelerator. A national agency with expertise across the country our role is to ensure more people in England have access to better homes in the right places. To make this happen we intervene in the market to get more homes built where they are needed. We accelerate delivery, tackle market failure where it occurs and help to shape a more resilient and diverse housing market working with partners.

The Agency is a delivery partner to the Ministry of Housing, Communities and Local Government (MHCLG) for the £400 million remediation of high-rise buildings with unsafe ACM in the social housing sector and the £200 million fund for equivalent buildings in the private sector for properties outside of London[1]. 

As a delivery partner, Homes England is the relationship manager for applicants to the funds and responsible for taking applicants through the application process: carrying out diligence, recommending grant awards, contracting and making payments. Additionally, we are gearing up to deliver the new Building Safety Fund from late summer onwards.

The Committee has set out four specific questions that it would welcome input from Homes England as part of the evidence gathering phase of the inquiry:

• How easy or difficult has it been to liaise with Government on what standards of compliance are?
• What support you feel you need from the Government and are you getting it?
• What impact has the cladding programme had on your plans for new homes?
• Has there been any change in housebuilders’ ability to secure financing or insurance due to the cladding programme?

Responses to each of these questions is provided in turn below.

• How easy or difficult has it been to liaise with Government on what standards of compliance are?

Homes England is commissioned to deliver the Government’s cladding remediation funding. Our role is to make sure that applicants to the fund understand what the standards of compliance are, and work through the application process to enable grant payments to be made to support the delivery of remediation works.

The guidance that has been issued to us in respect of the fund has been sufficiently clear to enable Homes England to progress delivery of the programme. We believe the guidance for applicants is also clear.

Where there have been any perceived ambiguities, we have worked closely with MHCLG to clarify and they have provided further guidance and advice in a manner that has not impacted the administration of the programme. For example, where the Fund requirements exceeded those that building control or approved inspectors might otherwise have deemed acceptable, MHCLG were made aware and the Agency supported the department to produce additional guidance to provide clarification for issue to applicants.

From the point of view of administering the programme, the Agency has not experienced any feedback from applicants suggesting that they are not clear about compliance requirements in order to access funding.

• What support do you feel you need from the Government and are you getting it?

The Agency is not responsible for the physical remediation of buildings but as a delivery partner of the Government we have a positive working relationship and are clear about what Homes England’s role is in delivering the funds and what the Government expects of us.

Homes England’s role is to make sure an applicant understands the Fund requirements, and work through the process to be able to get an applicant into contract so that grant payments can be made.

There are three main phases to the application process:

1. Eligibility approval to ensure both the block (which must be over 18 metres in height) and the organisation with legal responsibility for the remediation are correctly identified. The Agency deploys legal and technical advisers to carry out these checks.
2. Full works and costs approval following a full application based on a tender price. Agency advisers assess the works proposals and the costs to ensure Government is funding only eligible works and that the cost of these is reasonable; Homes England liaise between our advisers and the applicants during what can be quite a complex stage involving the submission and review of a significant amount of relevant documentation.
3. Drawdown and completion following application approval. Homes England continue to work closely with the applicant during this phase and whilst remediation works are on site to ensure progress is being made and to help mitigate any issues during the delivery phase of the scheme.

The Government has also provided direct project consultancy support to applicants via Faithful & Gould (F&G) and Homes England are working alongside F&G to identify and support those applicants who need it. Specifically, F&G support applicants who need help with identifying where to go for the necessary professional advice, where applicants need help with a procurement approach or where they need help to identify possible contractors to carry out the work itself.

The current system has been working successfully and the Agency has established good working relationships with applicants to assist them to navigate the process.

• What impact has the cladding programme had on your plans for new homes?

To deliver the cladding remediation funds, the Agency has established a dedicated Building Remediation Team and resourced it appropriately; our role as Government’s delivery partner in this space is not impacting on our core mission to help deliver more homes.

More broadly, Homes England continues to deliver a variety of funding programmes on behalf of the Government to support the housing sector, and to realise the Government’s ambition of 300,000 new homes per year by the mid-2020s. In the last twelve months, the Agency has exceeded its key performance indicators of delivering new homes, delivering affordable homes and supporting people into home ownership.

• Has there been any change in housebuilders’ ability to secure financing or insurance due to the cladding programme?

Through the delivery of the Government’s programmes to support the housing sector, Homes England has a duty from concept through to delivery to provide scrutiny throughout the life of a project to ensure that building safety standards are being met.

As a funder, the Agency must be entirely comfortable with proposed build methods and any cladding being utilised would need significant technical detail and advice as part of our due diligence. Whilst the additional level of scrutiny may add some time to delivery timescales, Homes England is unequivocal that any project receiving funding must be in accordance with current building safety standards.

Potential new build development opportunities coming to the market requiring finance and insurance would be scrutinised in terms of the construction components and the Agency is seeing that architects recognise the issue of cladding in their designs and choice of materials.

There is a greater challenge around existing assets, an area of the market that is of particular interest for Build to Rent investors, who are likely to be more exposed to insurance risk, and a lack of finance to be able to re-develop buildings that may have cladding already installed.

July 2020