Written Statement: Building Safety Funding in Wales

Home should be the place where you feel safe. At the moment it is where we are increasingly spending most of our time as a result of the coronavirus pandemic.

Some people living in high-rise properties across Wales do not feel confident that their home is the safe and reassuring place it should be. Instead, they are worried about potential building defects, which pose fire and broader health and safety risks.

We continue to work with partners including local authorities and the Fire and Rescue Services to ensure immediate fire protections are in place.  We are now actively exploring funding options to support leaseholders with necessary work to their buildings.

Both the urgency and the nature of remediation will undoubtedly necessitate different approaches for different buildings.  We need to ensure options are workable, serve the best interests of both leaseholders and wider public and also recognise the responsibility that lies with building owners and developers. 

It is an uncomfortable truth that whichever option we pursue it is not likely to result in a completely satisfactory result for all.

This is not a challenge we are facing alone - we are working with our counterparts in the UK Government and other devolved administrations.

People who purchased their properties did so in good faith, believing they met all relevant safety standards. They are now being put in a position where they are facing significant financial costs to put right faults that should never have occurred.

I do not think it is right for leaseholders, who bought properties unaware that they had fundamental defects, to pay for remediation; neither do I think it is right that the Welsh taxpayer should do so.

Where developers have clearly failed to build to required standards, they should step up to their responsibility and put these faults right. I am keen that as UK Governments we explore every available avenue to ensure that those best able to address the issues meet their responsibilities.

Some developers have already demonstrated that they can do this beyond considerations of warranty.  Steps have already been taken, and are ongoing, to remediate non-compliant ACM cladding on buildings across Wales, for example.

I would urge developers to apply the same approach to other remaining defects, such as poor internal compartmentation, lack of adequate fire-breaks and installation of other types of non-compliant cladding. I want to explore with developers what more can be done. I have written to developers to invite them to meet me to discuss the steps they will take to support us in this work.

Welsh Government wants to limit the impacts on leaseholders as far as possible and also to ensure that leaseholders understand fully all ramifications of any action we take so that they can be supported in the best way possible.  

Where there are urgent or significant issues, local authorities and the Fire and Rescue Authorities have the enforcement powers and levers to take action.  However, it is important to understand that when such action is taken, it can result in further disadvantage to leaseholders as they can struggle to obtain mortgages or sell their properties where there is live enforcement action  being taken in relation to a building.  In addition, we are exploring options such as asking local authorities to exercise their powers to undertake works in default, however, once again this could potentially solve the ongoing worry about safety but it is unlikely to solve all of the leaseholders’ problems as costs would still need to be repaid.

We must also consider Welsh taxpayers, who are equally not at fault for these building failures and should not have to pay the bill for remedying them.

The question about who receives any funding to carry out the required works is also not straightforward. The ownership and management relationships are different for each building, as are contractual obligations between the leaseholder, the freeholder, the original builder and the management company and any insurers or lenders. This means that it is not possible to find a global solution for all buildings affected.

To address these issues, we are considering funding models that allow us to ensure work is carried out to make these buildings safe, help prevent leaseholders from facing the full burden of the costs and ensure funding is contributed from other sources.

We are also considering which defects the funding should cover. There is funding available in England to remove cladding but we know this does not go far enough. Providing funding to replace cladding, which may cover up what are often more complex and problematic issues does not solve the problem or make these buildings safe. That is why in Wales we want our plans to include other defects such as compartmentation, and more proactive measures such as the installation of sprinklers.

It is this complexity which dictates the pace of driving this work forward; it is not a reflection of my commitment to supporting those affected. It is imperative that we ensure the options are properly scoped, risk assessed and their consequences fully understood. We are working as quickly as possible to find a solution but it must also be the right one.

Members will also be aware that we have been undertaking a major programme of work to reform our approach and create a new building safety regime for Wales to ensure these and other problems do not continue to occur in the future.

We will set this out in a White Paper early next year and I will keep Members updated as work progresses.