Draft Building Safety Levy (England) Regulations 2025
(2 days, 11 hours ago)
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The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Samantha Dixon)
I beg to move,
That the Committee has considered the draft Building Safety Levy (England) Regulations 2025.
Is it a pleasure to serve under your chairmanship, Sir Desmond, in my first outing as the Parliamentary Under-Secretary of State for Building Safety, Fire and Democracy. This Government are committed to the remediation of residential buildings with unsafe cladding in England. Our remediation acceleration plan sets out how we will remove barriers so that buildings are fixed faster. Crucially, that will allow residents to be, and feel, safe in their homes.
The Government have already committed £5.1 billion of taxpayers’ money to the cost of remediation. We want to protect leaseholders and residents from further costs that are not of their making, and the building safety levy is an essential step in achieving this. Its purpose is to fund the Government’s building safety remediation programme—we estimate that we need to raise £3.4 billion over 10 years—and these draft regulations enable the levy to be imposed. The levy will be charged on certain building control applications for new residential floorspace in England. Subject to the approval of both Houses, it will start being charged from 1 October 2026.
Local authorities will collect the levy on behalf of central Government. They are well placed to carry out this role, as custodians of local building control with tax collection expertise. I thank local authorities for the vital role they will play and for the steps they are already taking to prepare. My officials are supporting them to ensure that they are ready for levy launch. We will provide collecting authorities with grant funding for set-up costs. All ongoing costs will be recoverable from levy revenue received.
The levy provides essential funding to deliver a safe built environment that meets residents’ needs. It complements our broader housing goals, including the delivery of 1.5 million high-quality homes over this Parliament. The levy is designed to minimise any detrimental impact on housing supply, while securing the required revenue. To achieve that, there are different levy rates for each local authority, reflecting local house prices. That protects viability in areas where house prices are lower. Development on previously developed land will benefit from a 50% discount rate. That discount compensates for the often higher cost of developing that type of land, ensuring that more sites remain viable.
The Government are committed to getting Britain building again. Small and medium-sized builders play a crucial role in driving up house building rates, but they have faced significant challenges in recent years. We are therefore helping SME developers by exempting developments of fewer than 10 dwellings from the levy charge.
Earlier this year, we announced the biggest boost to social and affordable housing investment in a generation. The building of more good-quality, affordable housing must be accelerated. With that in mind, all affordable housing is exempt from the levy charge. However, we have gone further: any housing built by a non-profit registered provider of social housing is also exempt. Profits from sales of such homes are often reinvested into the provision of further much-needed affordable housing.
In addition, supported housing and other types of important community facilities, such as hospices and care homes, are also exempt from this charge. We will keep the rates and processes under review and will report at least every three years. I commend the draft regulations to the Committee.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
It is a pleasure to serve with you in the Chair, Sir Desmond. I am sure you will be pleased to hear that His Majesty’s Opposition do not propose to divide the Committee on the regulations. As the Minister set out, they arise from the Building Safety Act 2022, which was passed by the Conservative party in Government.
After extensive consultation, the regulations should command broad support. We welcome in particular the commitment to enshrine the exemptions for smaller sites and for other types of development, about which extensive representation has been made about how the imposition of a costly levy would significantly inhibit their deliverability. We support the proposal for regular reporting on the outcome. We are aware that there has been extensive consultation with the 295 local authorities that act as building regulations authorities, and that their representations are reflected in the grant award to ensure that there are sufficient resources to get the system up and running. I am sure we will scrutinise the resulting reports in due course.
Tom Collins (Worcester) (Lab)
It is a real pleasure to serve under your chairship, Sir Desmond. I take this opportunity to welcome the Minister to her place. I am pleased that she mentioned the importance of moving rapidly to remediate buildings, because it is a matter not only of safety but of justice, and of providing reassurance and security for people. That has become starkly apparent in my constituency of Worcester, where the residents of Barbourne Works have found themselves facing not only the difficulties of an unsafe building but the uncertainty over who pays. I am pleased that the Government are moving forward with this quickly to bring about that certainty and the fast remediation of buildings. I thank the Minister for introducing the regulations, which I strongly support, and for all her hard work.
Olly Glover (Didcot and Wantage) (LD)
It is a pleasure to serve under your chairship, Sir Desmond, and I welcome the Minister to her place. The Liberal Democrats do not intend to divide the Committee either. Along with the Opposition spokesperson, we welcome the seriousness with which the Government are taking the matter and their positive steps to deal with the fact that thousands of people in our country still live in buildings with dangerous cladding, getting on for 10 years after the terrible 2017 Grenfell tragedy. We are pleased that the Government have thought hard about exempting certain types of social and affordable housing, as well as hospices and care homes. We therefore support what is being proposed.
We have a bit of concern about whether the proposed levy will provide sufficient funding for all the necessary remediation. We would welcome hearing a bit more from the Minister about the financial appraisal of how much money needs to be raised, whether that will be adequate and, if not, what other avenues are being looked at to ensure that we have all the funding we need to deal with these risks for ever more, so that we have no more Grenfells.
Chris Vince (Harlow) (Lab/Co-op)
I had not indicated that I wished to speak, Sir Desmond, but I briefly welcome the regulations and welcome the Minister to her place. I would be glad to have further conversation with her on some of my concerns about care homes. I wrote to her predecessor about that, and I will write to her in due course. Sorry, Sir Desmond, for the confusion.
Jonathan Davies (Mid Derbyshire) (Lab)
It is a pleasure to serve under your chairmanship, Sir Desmond. I welcome these measures, and it is good to see that they are welcomed across the Committee. Too many people in this country live in poor quality or dangerous housing, and unfortunately on a number of occasions we have seen the result of that. I also welcome the efforts to protect hospices and social housing from additional costs as a consequence of the regulations.
My specific question relates to the redevelopment of sites where there is a significant conservation deficit. In my own constituency of Mid Derbyshire, which includes the UNESCO world heritage site of the Derwent valley, is a very significant regeneration project, the Belper Mills. The building has sat empty for many years, but it played an important role in the development of the industrial revolution and has had a significant architectural impact on the town and the landscape of the UNESCO world heritage site. I am keen for us to make progress on the project, and I want to see movement on it as soon as possible. Can the Minister clarify, either in her summing up or later, how the redevelopment of heritage sites such as former mills will not be jeopardised by any additional costs that developers face, or where the wider development of a site is actually paying for its heritage aspect?
Will the Minister also provide clarity about the new burdens money? As a former local councillor, I appreciate that councils are well placed to implement these regulations; however, when the Government come up with an idea and ask councils to implement it, the new burdens money has helped at the start, but later down the line, councils have struggled to keep up with what the Government originally intended. I am also thinking about asset of community value status as part of that, which was introduced by the previous Government to help communities to take to control of locally important buildings and facilities. However, councils were insulated for only a certain amount of the costs, which has presented a challenge to local authorities.
James Naish (Rushcliffe) (Lab)
It is a pleasure to serve under your chairmanship, Sir Desmond. I want to put on record my support for this legislation, but I would also like to flag the case of Amanda Walker. Her mother, Glenda, lives in my constituency and has been in touch with me about Amanda, who sadly took her life in 2024 because she felt trapped in a flat that she could not sell. Amanda had been involved in giving evidence to the House of Lords about her situation until she decided that she could go no further, and she brought forward some proposed amendments to the Building Safety Act 2022, which I appreciate is now in legislation. Will the Minister do me the courtesy of spending time with Glenda so that we can discuss where Amanda got to, and whether anything can be done to recognise her positive legacy in relation to the Act?
Samantha Dixon
I thank all hon. Members for their comments; I will try to respond to them as fully as I can.
First, on the ability of local authorities to respond to this change, the point is that the levy rates are set out in regulations, and any change would require further regulations approved by Parliament. We will undertake reviews every three years on the operation of the regulations. Should the amount of funding increase or decrease, decisions on those changes will be taken at that time. Our intention is to shorten or extend the anticipated duration of time over which the levy is collected, rather than increase or decrease the levy rates, which allows certainty for developers and landowners.
Of course, I would be more than happy to meet with my hon. Friend the Member for Rushcliffe and his constituent Glenda to discuss the very sad case of Amanda. The whole point of these regulations is to remediate buildings, particularly for leaseholders, as soon as possible so that such anxiety and a sense of being trapped is no longer experienced by residents across the country, so I will certainly do what my hon. Friend asks.
My hon. Friend the Member for Mid Derbyshire asked about exemptions. I will write to him on the detail, but the point is that there is the exemption, or reduction in the rates, for brownfield sites, which may be appropriate in that particular case. I will ask officials to write to him on the details of that particular issue.
The building safety level is essential to fund the remediation of historic building safety issues without further burdening residents and leaseholders. The Government are committed to delivering 1.5 million homes this Parliament to meet the country’s long-term housing needs and unlock growth. That mission must work in parallel with our commitment to remedying the building safety failures of the past. The industry that contributed to such problems must pay to remedy them. The draft regulations before the Committee set out a fair approach to collect the required funds, while ensuring minimal impact on housing supply and industry.
Question put and agreed to.