'1bn Building Safety Fund For Non-Acm Cladding Remediation Is Launched

• Published date: 05 June 2020
• Author: Ms Sue Ryan and Tom George
• Subject Matter: Finance and Banking, Real Estate and Construction, Financial Services, Construction & Planning, Landlord & Tenant - Leases
• Law Firm: Gowling WLG

It is little more than one year since the Secretary of State announced - on 9 May 2019 - that the Government intended to fully fund the removal and replacement of unsafe ACM cladding on private sector residential buildings 18 metres or over, with costs to the Government estimated at £200 million.¹

Since then, following numerous consultations within the industry, the Government has had to react quickly to increasing pressure to make finance available to remediate high-rise residential buildings that have unsafe non-ACM cladding systems (such as non-aluminium metal composite panels, HPL (high pressure laminate) panels, render and timber wall systems where these do not meet fire safety standards).

The concept of a fund to support the remediation of such non-ACM cladding systems was first announced by the Government on 11 March 2020 (following the budget announcement that there would be a new £1 billion Non-ACM Cladding Systems Remediation Fund ("Fund")). Some 11 weeks later, the Ministry of Housing, Communities & Local Government (the MHCLG) announced the official launch of the Fund and is now asking potential applicants to register their interest by completing a detailed fund registration prospectus². Following the registration process, the Fund aims to launch its detailed application process by the end of July 2020 with a detailed scrutiny process likely to take until the end of the year.

What does the Fund cover?

Where eligible, the Fund will meet the capital costs of removing and replacing unsafe non-ACM cladding systems on high rise residential buildings which may otherwise be passed on to leaseholders (through an increase to service charges where permissible under the lease), where building owners (or other entities legally responsible for making buildings safe) are otherwise unable or have refused to do so. In that respect, one of the Fund's key aims is to provide comfort to those tenants, leaseholders and residents who reside within buildings clad in unsafe non-ACM cladding systems, such that they no longer have to live in the knowledge that their buildings are unsafe, whilst faced with little prospect of remedial works being undertaken.

Of course, building owners operating in accordance with their statutory duties to ensure the safety of their buildings (and its occupants) should and many already have taken action, but the Fund will address some of the barriers to remediation being carried out quickly (i.e. access to funding) that previously...