Government Fund to replace unsafe ACM cladding

United Kingdom

The Government has announced it will provide funding of £200m to meet the costs to replace Grenfell Tower type cladding on an estimated 170 high-rise private blocks in England. High-rise in this context means a building above 18 metres high.

When delivering his statement, Housing Communities and Local Government Secretary James Brokenshire MP, confirmed that the Government will fully fund replacement of ACM cladding on high rise residential buildings where the building owners have failed to complete the works. This is in order to speed up the vital replacement works to make these buildings safe and protect leaseholders from the associated costs.

Building owners will be able to register for the fund from early July. They will have a period of 3 months to access the fund and as a condition of receiving funding, the building owner will be required to take reasonable steps to recover the costs from those responsible for installing the cladding. The Government says it will look carefully at those building owners who fail to act to remedy the cladding, albeit we await further details as to what action may be taken against those owners who do not act.

The Government has recognised that it is important to ensure that the funding scheme does not set a precedent whereby leaseholders or freeholders look to Government to remedy future failures in the construction or maintenance of residential buildings. It has emphasised that the grant fund for remediation of ACM cladding will not be repeated in other circumstances and that it is looking to take significant steps in the future to reform the leasehold system. Such steps include:

  • Implementing reforms recommended by Dame Judith Hackitt’s Review of Building Safety.
  • Increasing insurance and warranties.
  • Exploring reform to service charges including the introduction of a mandatory sinking fund to manage unforeseen maintenance costs for residential buildings.