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Written evidence submitted by London Councils

About London Councils

London Councils is a cross-party representative body for all 32 London boroughs and the City of London Corporation. As such, our members have a direct interest in the outcome of this inquiry from the perspective of a social landlord, housing and planning authorities, and as custodians of the safety and prosperity of local communities throughout the capital.

                                                 Introduction

London Councils welcomes the opportunity to submit evidence to this committee and continue to play its part to ensure and expediate fire safety works on multiple-occupancy high-rise blocks across the capital.

Since the Grenfell Fire tragedy, London Councils along with London Boroughs and the London Housing Directors’ Group have worked with government and stakeholders to identify dangerous cladding on both social and private residential blocks. We have also called for a ban of dangerous cladding systems (both ACM and non-ACM), lobbied for funding commensurate to the task, worked to expediate the remediation of dangerously clad blocks in a safe, sustainable way, using a whole building risked assessed method, and called for deep and wide ranging reform to building and fire safety regulations.

We welcome government action in these important areas, in heeding the calls of stakeholders such as London Councils and banning combustible materials, funding the removal of dangerous cladding to the sum of £1.6bn, and reforming building regulations. It must be stated however, that London Councils, the LGA, NFCC, LFB, and many other stakeholders, have been calling for these measures to be enacted for nearly 3 years, and have found government policy making to move slowly to these safety concerns. Government must be more proactive in its policy making on fire safety.

This policy lag can be seen clearly in the NAO report timeline, for example: from the Grenfell Tower fire in June 2017 there is a one year wait for the announcement of the fund to remediate social sector buildings, despite representations of its need and urgency to get remediation moving. A further year of lobbying was needed to May 2019 before the private sector remediation fund was announced which then opened for application in September 2019.

London Councils and others had warned government about the dangers of non-ACM flammable cladding systems since early 2018; a data collection exercise was not announced until September 2019, which was underfunded, placing additional burdens on already stretched councils. The Building Safety Fund announced in March 2020, is very welcome, however, it largely excludes social landlords from accessing the fund, favouring the private sector, and buildings where owners and landlords have not been proactive in remediating their buildings.

Please find our key messages below outlining issues which need to be resolved in order to successfully and expediently remediate dangerous cladding from London’s buildings. The main section of this response includes feedback from boroughs on the hindrances to remediation work.

Key points

       The Building Safety Fund. Although the Budget unveiled a £1bn Building Safety Fund and placed welcome emphasis on securing compliance from building owners in the private sector, it is not yet clear how this figure was calculated. Further, the fund is only accessible to social housing in circumstances where they (in the case of councils), can prove the Housing Revenue Account is unviable. The fund also fails to support remediation of unsafe cladding for existing buildings below 18 metres, other fire safety measures such as fire door replacement and compartmentation issues, and does not cover the burgeoning costs of interim fire safety measures. Moreover, due to its relatively late introduction, those responsible social landlords who have stretched their budgets to remediate quickly and keep residents safe, now find themselves financially penalised when compared to far less responsible private landlords; London Boroughs are calling for an even playing field with regard to access to the Building Safety Fund.

       The Covid-19 impact. Most construction sites are not in operation, consultants are generally not undertaking site visits and there are significant delays in carrying out non-essential inspections and audits. London boroughs are facing significant additional pressures on budgets created by Covid-19. The additional £3.2 billion funding made available for local government to respond to Covid-19 is welcome. However, there are competing demands for this fund, and difficult decisions about which services and works to cut or curtail will need to be made unless additional funding is provided. 

There is also the impact on Housing Revenue Accounts (HRA) of the Covid-19 pandemic: early signs show a worsening of HRA balances across London, and increasingly shrinking reserves. From 2017/18 London’s aggregated HRA in-year balance entered a deficit. Each year since this deficit has increased, systematically shrinking reserves. Early indicators forecast that the in-year deficit will be more than tripled by the Covid-19 pandemic’s impact on HRA revenue to reach £175m per annum for 2020/21.[1] These realities leave little room for urgent fire safety works.

       The leaseholder access problem. Gaining access to leaseholder owned properties in multi-occupancy residential buildings is a key concern of London Councils. The Building Safety Manager (BSM) and/or the accountable person will not be able to holistically manage a building without robust powers to enter, inspect, and enforce action where appropriate. A recent High Court ruling against Oxford County Council in Piechnik v Oxford CC stated that the council does not have the right to access a leaseholder property in a social block to install fire safety improvements. This means it looks increasing like the only real route to resolving this issue and curtailing this massive hindrance to remediation work is through new legislation.

       The administrative burdens of the remediation funds. Remediation fund schemes have been very bureaucratic and granular and demanded very short turnaround time for applications. This is especially true of the private sector remediation fund. Until remediation is complete, leaseholders face significant challenges including the cost of interim fire safety measures; significant increases in insurance costs and an inability to sell as lenders refuse new mortgages. Government must do more to process applications and get funding to remediation projects quicker.

Full response to committee criteria

Building Safety Fund

We do not believe the £1bn fund will be sufficient to remediate all concerns in all remaining high-rise blocks for the following reasons:

• One borough that needs to remediate multiple blocks from dangerous cladding and/or dangerous spandrel panels has told us that they have been quoted £2-3m for one block. Based on this estimate, the total cost of remediation for that borough could be £56-84m.
• Simply to remove the ACM cladding from five blocks on the Chalcotts Estate in London, has been publicly stated to have cost £16m.[2] This would indicate that costs of £2-3m per block may be conservative.
• The £1bn building safety fund has been calculated before the Delta returns that are mapping out which buildings have what types of cladding are finalised. This makes arriving at an accurate figure problematic.
• Using a remediation estimate of £3m per building, the £1bn fund would cover works on just 330 buildings.
• The insulation manufacturer Rockwool has estimated that over 1,600 buildings over 18m or which are high risk because residents would need assistance to evacuate, have combustible material other than ACM in their cladding system.[3]
• The fund only covers buildings over 18m, but recent low-rise fires such as the Cube student hall of residence in Bolton, the fire at Samuel Garside, Barking, and the fire in Worcester Park, have shown that the scope of buildings captured under the fund will need to be increased to at least 11m and all buildings where vulnerable people sleep (estimated to be 100,000 additional buildings).
• The G15 (London’s largest housing associations) estimated that the cost of upgrading all of its 1,145 tall buildings would be about £4.3bn, around 20% of the cost of the 60,000 affordable homes it has ‘committed to build’ in London. As a consequence, this would be ‘anticipated to result in the reduction of capacity to build’ about 43,000 affordable homes.[4]
• We don’t know what ‘all remaining concerns’ are. The remediation programme which started with ACM cladding, has since progressed to include fire doors and compartmentation, then other forms of cladding and render, then sprinklers and now external wall systems and structure. All these factors are not covered under the government funding programmes.
• It is worth noting that costs are likely to increase as the number of buildings increases and demand for labour, scaffolding and compliant cladding materials increase.
• We believe that a whole building, holistic approach is taken to assess risk – this means individual households, common areas, commercial units in the same building, and fundamental building structural elements like claddings systems and construction methods are considered as a whole. This would allow for funds to be spent more efficiently on fire safety measures that mitigate overall risk.
• Finally, social landlords are excluded from the funding source unless their HRA can be shown to be unviable. With the huge budget cuts to councils since 2010, the rise in homelessness costs due to the worsening housing crisis, ongoing large expenditures in fire safety, and the latest pressures the Covid-19 pandemic is bringing to council budgets, London Boroughs are stretched to breaking point.
• There is a specific social sector remediation fund of £400m for ACM cladding remediation, so it would seem inconsistent to tell social landlords they are on their own with other forms of flammable cladding systems which persist due to the same regulatory failings.

Administrative burdens for government’s remediation funds

• Previous schemes have been very bureaucratic and granular and demanded very short turnaround time for applications. This is especially true of the private sector remediation fund.
• A significant issue has been the requirement to attain leaseholder signatures to enable applications to be made for funding (under state aid rules). If this requirement cannot be waived, Government should consider allowing sufficient time to accommodate this requirement.
• The social sector remediation fund has received mixed reports but generally is seen to function more effectively than the private sector fund.

Skilled labour and additional challenges presented by the coronavirus pandemic

London Councils supports the government’s pledge to keep remediation work going wherever it is safe to do so. However, the additional safety measures needed to operate safely on a site with the Covid-19 restrictions in place have greatly slowed the pace of remediation works. We understand that currently over half of remediation projects are not operating.

Specific feedback from boroughs includes:

• Most construction sites are not in operation, consultants are generally not undertaking site visits and there is significant delay in carrying out non-essential inspections and audits.
• London boroughs are facing significant additional pressures on budgets created by COVID-19 as well as an ongoing loss of income. The additional £3.2 billion funding made available for local government to respond to COVID-19 is welcome. However, there are competing demands for this fund, and difficult decisions about which services and works to cut or curtail will need to be made unless additional funding is provided.
• Access to competent resources with relevant Professional Indemnity Insurance appears to be problematic. This is a pre-existing issue which has been worsened by the pandemic.
• The lead in time to obtain assessments of building fire safety is significant due to volume; the process can take months.

July 2020