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Revealed: Councils struggling to fund post-Grenfell improvements

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Councils’ ability to fund fire safety improvements to high-rise buildings in the wake of the Grenfell Tower fire varies wildly, LGC research has found. However, even those with ample funds have warned the required work will divert cash away from much needed housing projects.

With costs expected to reach up to £31m for at least one local authority, LGC has found some councils will be unable to afford the proposed works from the reserves of their housing revenue account.

In some instances planned improvements to other buildings are due to be delayed while Brent LBC’s chief executive Carolyn Downs has suggested the London borough will not be able to build new homes if the government does not fund some of its estimated £10m costs.

Data supplied to the Department for Communities & Local Government showed Brent had £4.5m in its HRA reserves at the end of March 2017. These reserve levels provide an insight into how resilient a council’s HRA is to unexpected costs.

Planned spending on post-Grenfell fire safety improvements

Local authorityProposed spend £msHRA reserves 31 March 2017 £ms% of HRA reserves required 
Brent LBC 10 4.5 223%
Birmingham City Council* 31 4.7 661%
Croydon LBC 10 17.9 56%
Doncaster MBC 3 14.8 62%
Portsmouth City Council 12 9.6 128%
Sheffield City Council 3 12.6 24%
Wandsworth LBC 30 125.6 24%

*Birmingham blocks have not failed any of the government’s fire safety tests.

While it is possible for some councils to borrow more to fund works, Ms Downs said Brent was set to reach its borrowing cap for capital purposes in 2018-19.

In a letter sent to communities secretary Sajid Javid last month, Ms Downs wrote: “The council does not believe that social housing tenants should have to pay for these improvements to the stock through a deprioritisation of both planned and reactive repair and maintenance works. For example £10m equates to 40 new homes or the replacement of 4,000 boilers.”

As such, she said Brent “request the government to provide the direct financial support to meet the costs incurred”.

LGC understands samples from tower blocks owned by 15 councils have so far failed the government’s revised testing regime, which has been assessing the fire safety of the aluminium composite cladding used at Grenfell Tower with different types of insulation. Samples from just one council remain to be tested.

LGC contacted all of the councils which we have established have seen samples fail tests. Six councils provided information on expected costs (see table) while a further five – Hounslow, Camden and Newham LBCs, Oxford City Council and Sandwell MBC – said they had not yet made estimates of the cost of the work.

Portsmouth City Council, where two council blocks have failed tests, is another local authority which is estimating the cost of its works (£12.2m) will exceed the level of its HRA reserves – £9.5m. In a report which went before cabinet at the end of June, Portsmouth said “it would be necessary to amend the existing capital programme and temporarily reprioritise the capital schemes” in order to fund the works.

Some councils, however, do have the necessary funds available, including Wandsworth LBC which is due to spend about £30m on retro-fitting sprinklers in all of 100 of its blocks which are higher than 10 storeys. Only two have failed the cladding test.

Chief executive Paul Martin told LGC it was able to afford the works due to the “healthy” state of its HRA – according to the latest figures the borough’s HRA reserve levels are above £125m.

None of Birmingham City Council’s residential tower blocks use ACM cladding however the council is still planning to spend £31m on improving fire safety, despite having just £4.5m in its HRA reserves.

The city said it could pay for the works by “selling assets owned by the council”. Leader John Clancy (Lab) said: “The government should accept this is a national emergency that fully justifies establishing a fund to allow councils to fit sprinkler systems as a matter of urgency.

“If the government fails to respond appropriately, I believe our tenants would expect work on less important building projects to be delayed so that we can make sure our tower blocks are safer places to live in.”

Local Government Association chief executive Mark Lloyd said last month that “money features in every conversation I have with councils” about the response to Grenfell.

Addressing MPs before Parliament broke up for summer recess, Mr Javid said councils should request financial assistance “if they cannot afford” the works. The LGA is seeking clarity over what financial help, if any, the government is proposing to provide.

A DCLG spokesman said: “We’ve been clear with councils and housing associations that we expect them to do whatever local fire services and experts say is necessary to make residential buildings safe.

“We will ensure that where local fire services have advised works are essential to ensure the fire safety of a building, current restrictions on the use of financial resources will not prevent them going ahead.”

 

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