Chamber and committees

The business and regulatory impact assessment will look at the impact on the sector. That will probably be more of an issue for developers that have sole responsibility for the remediation of a building, because that will be the bigger cost, whereas the levy will be a contribution to a bigger pot. We have talked about the £10 million threshold for developers that sign up for the remediation of their buildings, because we understand the position of SMEs that might not have the wherewithal to do that, as it would not be viable. That is why we landed on the £10 million figure.

There were arguments for this to be done on a UK basis, because some of the developers are UK developers and we felt that that would have made more sense, but we are past that point. Inevitably, the levy—whether in England, Wales or here—was never going to be able to cover all the costs of remediation; the public purse was always going to have to make a significant contribution.

Obviously, the levers that we have are the ones that we have. The levy will make a contribution but, without a doubt, we will need a line of sight of capital provision for remediation over the next few years to ensure that it is adequate and at a level and of a trajectory to meet the required SBA outcomes and remediation work. There is a significant requirement on the public purse but, at the end of the day, all Governments have to step in when it comes to building safety and public safety.

I want people to have their buildings remediated and to be able to move on with their lives as soon as possible. However, getting it right is also important, as is Stephen Lea-Ross’s point about freeholders. If there is a single freeholder, as is the case in England, it is much easier to get agreement. However, in Scotland, there might be 100 home owners in a building and they must all be in agreement. That requires a different process, and the legislation will really help to push forward with SBAs when there is no agreement.

Yes, of course—

Those are similar issues to those that have been raised by the sector in England. Just last week, I had a meeting with a number of people who are involved in the sector and I would say, as I said then, that we are talking about orphan buildings for which there are developers who have responsibility. We would expect them to get on and remediate and meet the cost of that.

There is then the question of who pays for the remediation of buildings where no developer can be identified. It is not fair for that cost to fall on taxpayers and the public purse. It will, of course, require an element of funding from the public purse, and we have set out that we will meet our obligations there. However, a contribution from the sector is important, given that those buildings will require remediation.

We have set out an indication of what revenue we think that the order will raise in line with what the UK Government has anticipated that it will raise, and whatever it raises will be only a contribution to the overall costs of orphan buildings. It will not meet the entire cost; it is a contribution. It is about balance. It is not unfair to ask the sector to make a contribution, as the public purse will make a contribution to the remediation of buildings where there is no developer that can take responsibility for them.

That is my top-line response. I can understand the issues raised, but our approach is about putting in place a proportionate response.

It will be in year 4.

So it might be an overestimate, but that is the case for good reason.

I will come back to you on that point specifically.

Although the issues that stakeholders raised with me included an element of the impact on land value and also whether behaviour will pass that on to house prices and whether that would then be a deterrent, their main issue was the cumulative impact—it not just about one impact, but what it looks like when it is all added up together. I said that we were very cognisant of that and were mindful that, if other things were to impact on the sector—on land value and house prices—we had to think of it in that context.

However, we will come back to you on your specific point.

Our judgment is that it should certainly be set at the same level initially, and the figure of £30 million is the amount that it would raise on that basis. Those issues need to be discussed in more detail, but we want to set the levy at the same level initially.

I will bring in Stephen Lea-Ross on that. It is really difficult to say. I cannot tell you what the global cost will be of remediating all the buildings, because we just do not know the extent. A partial remediation of a building could cost £300,000 and a full remediation could be upwards of £800,000, which is at least a £500,000 difference. We just do not know at the moment. Indeed, some buildings might require no remediation. As things stand, until the actual technical assessment is done, it is really difficult to assess that.

I have told the sector that I understand the point about certainty. I would not want a situation in which the rate of the levy constantly changes. We are working with the sector to try to have a period of stability, and we have set out the amount that we expect to receive from the levy. We can factor that in and maybe have some points of review, where we take stock of the actual SBA remediation costs annually and where the levy sits in relation to that. As you can imagine, I want to give the sector a bit of certainty in the initial phase.