12 March 2020

Budget 2020: £1 billion Building Safety Fund announced for the remediation of unsafe non-ACM cladding

In yesterday's budget, the Government announced the provision of a £1 billion "Building Safety Fund", which will be made available in 2020 – 2021.

What is the new fund for?

The new fund is being provided to facilitate the removal and replacement of unsafe non-ACM (aluminium composite material) cladding from high-rise residential buildings. This represents an acknowledgement by the Government that in addition to ACM cladding similar in nature to that present at Grenfell Tower, there are other cladding systems in regular use in the construction industry which represent a significant danger to life.

Hasn't the Government already made remediation funds available?

Yes. The £1 billion investment announced yesterday is in addition to the £600 million funds set aside in 2019. However, the 2019 funds are only available to meet the costs associated with the removal and replacement of ACM cladding. As noted above, the new fund will support the removal and replacement of non-ACM cladding systems, including high-pressure laminate (HPL), wood and other class C/D cladding as identified by the Independent Expert Advisory Panel.

Who can apply for the funding?

The fund will be available to building owners in the private and social housing sectors, in respect of residential buildings reaching a height of at least 18 metres. Whilst building owners may apply for funds, the Government has made it clear that any grant for the remediation of a private-sector residential building is intended to be for the benefit of the leaseholder owners of the residential units.

The Government guidance also confirms that any building owner who has already committed to remove and replace non-ACM cladding is expected to honour their commitment without applying to the fund, in order that the fund is available to support those building owners who may not be able to bear the cost of remedial works.

Are there any conditions to the availability of funding?

Yes. The Government expects building owners to explore whether they have any contractual or tortious recourse against the parties responsible for designing and installing the unsafe cladding systems. We can expect the Government to require that building owners commit to pursue any potential claims as a condition of funding being made available and to repay any money recovered to the Government. It remains to be seen whether and how the Government police this requirement.

Can we expect any further funding on top of the £1.6 billion already committed?

No. The Government has stated that no further funding will be made available for the remediation of unsafe cladding.

Regulatory changes

Yesterday's announcement comes ahead of the introduction of a new regulatory regime in line with the reforms recommended by Dame Judith Hackitt. In the meantime, we can expect the Government to continue to monitor the efforts of building owners to remediate unsafe residential buildings and to "name and shame" those where no action has been taken.

If you require any further information regarding the issues set out in this article, please contact Emily Holdstock or Alexandra Treacy.

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