Developers who covered tower blocks in unsafe cladding have paid back less than 3% of the cash lent out by the government to make buildings safe, sparking accusations they are “getting away with it”.

Ministers have so far handed landlords £199m to strip flammable ACM (aluminium composite material) panels from 98 tower blocks under the Private Sector ACM Cladding Remediation Fund. ACM cladding helped spread the 2017 blaze at Grenfell Tower in west London that killed 72 people.

In exchange for the loans, landlords were supposed to take “all reasonable steps” to recover the money from the parties responsible for installing the dangerous cladding in the first place, and then repay the public purse.

But in the four years since the loan scheme was unveiled, the government has clawed back just £5.08m, or 2.76% of the total cash given out, documents released under freedom of information law show. There are no penalties for landlords or developers who fail to recover the cash.

A similar probe by HuffPost UK in 2021 found that not a single penny had been paid back by that time, meaning all the cash has been recovered in the two years since.

The government admitted in its response to openDemocracy’s request: “Given the recovery of funding from those responsible for the presence of unsafe cladding can be a lengthy and complex process, we expect it to take some time to see money returned.”

Landlords have been able to apply for the loans since September 2019. Initially, only buildings over 18 metres tall were eligible for cash, though last year this was changed to 11 metres after it emerged leaseholders were being forced to cough up hundreds of thousands of pounds for remedial works or 24-hour fire patrols. Leaseholders in buildings under this height are still liable for their own costs.

In just over half the private sector buildings that were identified at risk (120 out of 232), landlords or other industry funders paid for work to be done without a loan being taken out. In 112 cases, this has not happened, with loans being approved for most of these and a handful of applications still in process.

Faulty and ambiguous

Following the Grenfell disaster, the government mandated that buildings across the UK be modified to remove dangerous materials.

On Sunday, housing secretary Michael Gove admitted in the Sunday Times that “faulty and ambiguous” government guidance had contributed to the blaze, adding that official guidance had allowed “unscrupulous people to exploit a broken system in a way that led to tragedy”.

A spokesperson for the campaign group End our Cladding Scandal said: “It's not right that those companies are getting away with it.

“There’s still a lot of different people being treated in different ways. There’s no certainty for leaseholders that you’ll get the protections in full, depending on your situation… The government can do a lot more.”

The Department for Levelling Up, Housing and Communities refused to name the landlords who had applied for the loans, claiming the information could aid people with “malicious intent” to attack buildings that were still clad in unsafe materials.