Four councils could be granted funding flexibility “within weeks” to pay for essential works to ensure the safety of tower blocks following the Grenfell tragedy, according to government officials.
Senior civil servants from the Ministry of Housing, Communities and Local Government (MHCLG), including permanent secretary Melanie Dawes, were this week grilled over the issue by MPs.
But they hinted that only ten of the 36 councils who have contacted the department about assistance with funding appear to qualify for funding flexibilities promised by communities secretary Sajid Javid.
During a session of the Communities and Local Government Select Committee, Tamara Finkelstein, director general of building safety at MHCLG, said: “Thirty six councils approached us with a question on what we could offer. Ten of these look like they may cover essential works. Four have provided information and we have had good conversations with us.”
Dawes added: “I hope in the next few weeks we will have some decisions made on a very complex set of issues which will give some assurance to committee and local government that we will be making progress.”
MPs raised concerns that councils carrying out fire safety works necessitated by Grenfell were still uncertain over how they would meet the costs, seven months after the tragedy.
But Dawes defended the time the decisions were taking, saying: “This is urgent but also quite complicated. Finding contractors to replace the whole of a façade is not a trivial question on how this is planned and delivered. We are not delaying. We hope to reach decisions quite soon on some authorities.”
The officials hinted that authorities would have to make very strong arguments for the installation of sprinklers in existing buildings to be considered as “essential works”.
At the start of January, Alison Butler, deputy leader of London Borough of Croydon, wrote to housing minister Alok Sharma requesting a face-to-face meeting to discuss the financial consequences of its £10m programme to retrofit sprinklers in its high-rise housing.
Dawes told the committee: “We are dealing primarily with a problem of faulty cladding that was put up where it is now clear it is not safe. That is our primary focus.
“In some circumstances, local authorities are very clear that sprinklers are part of that. We haven’t ruled that out but are having conversations with individual local authorities.”
Finkelstein said councils making successful arguments would be granted “more borrowing headroom or access to other funds that normal restrictions wouldn’t allow them to use in terms of general funds”.
Also during the committee, Dawes said the current consultation on the investment code, which could require councils to disclose more information about borrowing for property investment purely to raise a yield was “the kind of review we do need to do to make sure the overall health of the system is good”.
She said: “The spirit of that consultation is that councils need to be pretty careful of pure commercial activities that are only about getting a return .
“What we have found in the work we have done so far is that most of the commercial opportunities that local authorities are investing in are also about generating benefits for their communities.
“So, they generally — particularly when they are investments in their communities — are about regeneration or perhaps tackling fuel poverty, and so on.”
In addition, Dr Jo Farrar, director general of local government and public services at MHCLG said councils should use some of the £2bn extra funding for social care announced in last year’s Spring Budget to insure against the collapse of a major care provider.
She said: “We expect local authorities to be using some of £2bn to make sure market is sustainable.
“Local authorities are used to people coming in and out of the market — and pressure on the system — and have very good contingency plans to ensure people have plans in place if the market becomes fragile.”
