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Delay expected in affordable home delivery due to £400m cladding bill

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The government intends to pay councils for works to remove cladding from high-rise buildings by initially deducting the money from its affordable homes programme.

LGC understands this is likely to cause a delay in the rate at which new homes, some of which are intended to be for social rent, are delivered.

Earlier this month prime minister Theresa May said the government will pay for the removal and replacement of cladding on high rise buildings. The cost of doing this for council and housing association properties is estimated to be about £400m.

The promise came the day before Dame Judith Hackitt’s review of building regulations and fire safety was published. It was also about 11 months on from the Grenfell Tower fire disaster, during which time more than 30 councils had requested, but did not receive, financial assistance from the government to carry out fire safety improvements works.

The Ministry of Housing, Communities & Local Government confirmed the works will initially be paid for using funds in the affordable homes programme.

A spokesman for ministry said: “No money will be lost from the affordable homes programme, which remains over £9bn and it will still deliver the same number of properties.”

The £9bn figure is largely made up of previous announcements, including £4.7bn grants announced in April 2016 and a further £1.4bn announced in November 2016’s autumn statement. However, the affordable homes programme was topped up by £2bn in the autumn Budget with the aim of providing an additional 25,000 affordable homes, including ones for social rent.

LGC understands the money will come out of the affordable homes programme initially with the Treasury subsequently reimbursing the ministry. However, that is not expected to happen until after the spending review.

There is still some uncertainty though about how councils can access the fund and for the type of work it will cover.

“The government will set out further details shortly about how councils and housing associations can apply for funding, including conditions attached to the grant,” notes from the ministry and the Treasury said

The estimated cost of funding the works to remove and replace cladding on high rise buildings does not cover the costs associated with retrofitting sprinklers. LGC previously reported how Nottingham City Council wanted government help with the £8.5m cost of fitting sprinklers in the 13 residential tower blocks it owns. Croydon LBC was another wanting financial assistance for its £10m fire sprinkler programme.

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