Impact of remediation costs for social landlords on housebuilding ‘not being taken seriously enough’, PAC warns

Angela Rayner, the deputy prime minister and housing secretary, announced a Remediation Acceleration Plan in December, with a deadline for the end of 2029, that all high-rise buildings over 18m tall with unsafe cladding in a government-funded scheme will have been fixed.

In addition, every building over 11m in height with unsafe cladding will either have been remediated or have a date for completion, with landlords otherwise liable for severe penalties.

However, the Regulator of Social Housing recently warned that a fifth of social housing blocks with life critical fire safety (LCFS) defects – 406 – either had an “unclear” completion date or one that was “beyond 10 years”.

The PAC inquiry heard from the National Housing Federation (NHF) about the impact of funding cladding remediation on social housing development.

“[The NHF] also told us there were adverse affects on the government’s ability to meet its target for 1.5 million new homes [and] on the cost of temporary accommodation and homelessness,” the report said.

The NHF told the committee that if the £3.8bn social housing providers were expected to spend on remediation were instead invested in development, it could result in an additional 76,000 new homes.

“We are not convinced MHCLG is taking the potential impact of its remediation plans on wider housebuilding targets seriously enough,” the PAC said, before adding that the cost to developers of the Building Safety Levy could exacerbate the situation.

This month, more than 100 house builders signed a letter calling on the chancellor to reconsider plans to introduce the levy, due to come into force in autumn 2025, in view of its potential impact on housing supply. 

The cladding crisis “shows signs of having a chilling effect on housebuilding overall, with social housing providers forced to divert resources to remediation rather than badly needed new homes”, said Sir Geoffrey Clifton-Brown, the chair of the PAC. “Despite longstanding promises to make industry pay, government has yet to find a way to secure this outcome.”

Across seven key conclusions and recommendations, the PAC expressed scepticism about the “adequacy and achievability” of the Remediation Acceleration Plan, noting the “painfully slow” progress in the eight years since the Grenfell Tower fire.

This is, in part, due to the total number of buildings in need of cladding remediation still being unknown, as are the associated cost and timespan.

“Remediating buildings more quickly will in part rely on legislative changes, the timing for which MHCLG does not control,” the report said.

It called on the department to provide an update within six months, setting out what steps it would be taking to bridge gaps between its plan and the policy and legislative changes needed to deliver them.

It also said MHCLG should update on measures to ensure non-cladding defects are not holding up progress on cladding remediation, and on Homes England’s progress identifying buildings with dangerous cladding, and produce proposals to ensure all fire safety defects are addressed.

Among the other main points raised by the inquiry was a lack of the necessary capacity and skills across regulators, local authorities and the construction sector to achieve MHCLG’s acceleration plans.

Adam Hug, housing spokesperson for the Local Government Association, said councils were committed to speeding up remediation.

However, he added: “As this report shows, it is still a major issue that requires significant funding and resource to address properly. The severe financial pressures facing councils are having an impact on their ability to carry out this work as swiftly as they, and their communities, would like.

“Councils and fire services are already taking enforcement action to force building owners to deliver their obligation to keep residents safe. We look forward to the funding to double enforcement councils promised in the government’s Remediation Acceleration Plan, the improved access to remediation funding for social housing, and the new powers in the remediation bill, which needs to be brought forward as soon as possible.

“The upcoming Spending Review is the moment to ensure that local government has sufficient resources to carry out this work and keep people safe.”

The PAC also called on the MHCLG to step up efforts to put residents at the heart of remediation efforts, and to do more to manage risks that residents in affected buildings face exorbitant insurance premiums in the long term.

Sir Geoffrey added: “Unfortunately, we are united with campaigners in deeply regrettable scepticism that current remediation plans are capable of delivering on what’s promised.

“We would therefore urge government to look to the recommendations in our report, to help close the gap between their current plans, and the reality on the ground.”

In response, a government spokesperson said: “This government has been taking tough and decisive action after years of dither and delay, going further than ever before to speed up the unacceptably slow pace of remediation and provide an end in sight for residents who have suffered for too long.

“We continue to work closely with industry, local authorities and residents to accelerate remediation efforts while ensuring those responsible for unsafe buildings cover the costs, with new penalties and criminal sanctions on building owners who refuse to take action.”