Building Safety Levy (Amendment) (England) Regulations 2026
House of Lords · Grand Committee · 2 Sep 2026 · 12 speeches · Official Report
Considered in Grand Committee
Moved by
That the Grand Committee do consider the Building Safety Levy (Amendment) (England) Regulations 2026.
My Lords, the remediation of residential buildings with unsafe cladding in England is a priority for this Government. Nine years on from the Grenfell tragedy, there is no justification for any building to remain unsafe. Helping residents to feel safe in their homes and move on from this issue is crucial work. The Government are committing £5.2 billion of taxpayers’ money to the cost of remediation and the building safety levy is an essential part of the remediation funding package, which will protect leaseholders from costs and ensure that taxpayers are not further burdened. We estimate that the levy needs to raise £3.4 billion, likely over a 10-year period. The revenue target may be adjusted in accordance with the number of buildings requiring remediation and the costs of works. The levy regulations were made in November 2025 and will come into force on 1 October 2026. The draft amending regulations before the Committee today clarify how the levy will work and are intended to come into force on 1 October. The levy will be charged on certain building control applications for new residential floor space in England. It is important to note that developers have known about the levy since February 2021 and its rates since March 2025, providing a significant lead-in period to plan for and incorporate these costs into their projects. It will start being charged on new applications from 1 October 2026. The 2025 regulations allow for development on previously developed land, often...
My Lords, first, I wish to welcome the noble Baroness, Lady Blake of Leeds, to her new role. I look forward to working with her; I am sure that we will agree on some occasions, maybe more than most. Let me say right from the beginning that we Liberal Democrats accept the technical changes in this SI, because in effect that is what they are. The amendments are sensible, practical and entirely necessary to prevent any chaos following the levy’s coming into force in October. The positive changes to which the noble Baroness, Lady Blake, has referred are important to remove the loophole of previously developed land. Developers are very good at finding loopholes, so that is important. The spot check and having a strict notification period are also important, as well as separating purpose-built student accommodation from being classed alongside residential. That is positive and we support it. The Government have set a target of raising £3.4 billion, which is good. However, they are planning to raise this over 10 years. In the first year, the levy raises zero. In the second year, it raises-these are estimates I found from, I think, the Office for Budget Responsibility-just £55 million. By the fifth year, so in 2030-31, it will raise £395 million a year, so over the first five years it will raise just £1 billion of the £3.4 billion that it is estimated to raise. I guess there will be reasons for that, but it is unlikely to raise significant sums in the first couple of years. Once you...
My Lords, I also welcome the noble Baroness, Lady Blake, to her role on the Front Bench. It is great to see her. I remember the number of times that we stood on opposite sides in the LGA. We move on, and we are still in the same relative position. I thank the Minister for bringing forward these regulations to make corrective amendments to the levy regulations introduced last year. We recognise the need to make buildings safe-it is important-and the role that the levy plays in that, and the need for clarity. I agree with the noble Baroness, Lady Pinnock, who rightly raised the time it is taking to make these buildings safe and that, in effect, people are trapped within them. Recently, on the Social Housing Bill, we raised the issue of shared ownership, which is in a particularly egregious position. We welcome some of the changes: the earlier deadline for the authorities responsible for collecting and administering the levy to notify the person who is liable of an information check. But can the Minister confirm that authorities will have the capacity to meet these earlier deadlines? The Government have also made the decision not to take forward an extended exemption threshold for major residential development in the levy regulations. Can the Minister please expand on the rationale behind this decision? I want to touch on something else, because we have a housing crisis and a shortage of housing, and we are not building enough. The regulations include amending the definition of...
I appreciate that the Minister said that developers had been aware of this for a number of years, and I do not believe that this levy on its own will stop development. However, we have seen a constant layering of additional costs on development, whether it is the building levy, landfill tax, high-rise building safety, additional 106 or biodiversity net gain-among other things-and, in London, a variety of specific mayoral requirements. We absolutely agree that we need safe buildings and that they need to be funded, but, if the cost of building is greater than the sales price, homes will not be built. I fear that, in many parts of the country, as a result of this layering, we are approaching this point.
The Government are on track to build fewer homes than the previous Conservative Government, despite their election promise of 1.5 million homes. We do not want additional taxes and regulations on developments to the extent that they slow down development on brownfield land by making sites unviable. I appreciate that this is a balancing act, but it is a concern that we have. I would appreciate the Minister’s response on that balance.
I thank noble Lords for their very kind and welcoming comments. It is interesting to reflect on how long we have been working together. The noble Baroness, Lady Pinnock, and I go back, I think, to the last century.
Yes, probably.
It is a great privilege to be in this position, and I very much look forward to working with both the noble Baroness and the noble Lord. I stress “with” rather than “against”, because I think we come from a strong, shared commitment to all things local government-in particular, serving the people in our communities that we have variously represented. There are some tough times ahead, but I will do my best to address the concerns raised today. Dialogue will be ongoing, of course, particularly given the different legislation that is proposed; that will give us a real opportunity to go into much greater detail than we can probably do today. Let me respond to the concerns from the noble Baroness, Lady Pinnock, about the money, which is, of course, a crucial issue. To reiterate, the Government are committed to remediating buildings as quickly as possible. I have to say that the launch of the levy, which will come in in October, will not affect the pace of remediation. The Treasury has agreed that the necessary expenditure can be made in advance of receipts from the building safety levy rather than slowing remediation to match the profile of the levy receipts. Of course, the Government will report on levy receipts and remediation expenditure in the annual trust statement. I hope that gives the reassurance that the noble Baroness has been looking for. The remediation of unsafe cladding Bill will deliver on the manifesto commitments to address the pace of the remediation work. Most...
Motion agreed.