Cardiff Council is set to lead on a new loan scheme aimed at improving the fire safety of buildings in Wales. The council's cabinet made an in principle decision to develop, operate and administer the Welsh Building Safety Developer Loan Scheme which will provide interest free loans to eligible private developers.
A council report states that the local authority will provide the interest free loan for a period of up to five years so that developers can carry out fire remediation work on buildings of 11 meters or more in height. Councillors said they admired the aim of the scheme, saying improvement works on some buildings was "desperately needed" and "so long coming".
However, there was also concern among those councillors who said the scheme could place the council at risk and turn it into a "vehicle" used by the Welsh Government to lend money. The Welsh Government has made £20 million available for the loan scheme. However, this zero-interest loan will need to be repaid by Cardiff Council in full in April 2028.
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Cardiff Council would only be responsible for administering the loan. This includes inviting and assessing developer loan applications, undertaking due diligence checks, agreeing the terms of the loan and for monitoring, and reporting on the performance of the loan fund to the Welsh Government.
Leader of the Conservative group at Cardiff Council, Councillor Adrian Robson, asked if the risk is "really something we can afford to take on?". Under the 'financial implications' section of the council's report on the loan scheme, it states that "decision makers should note the risk that the full loan must be repaid by the Council irrespective of whether loans given by the Council to developers are recoverable."
Cardiff Council's corporate director of people and communities, Sarah McGill, said the council would "need to be satisfied that the arrangements that we have in place with developers were satisfactory and covered the risk to the council". She said: "Otherwise, we would need to go back to the Welsh Government because we wouldn't be satisfying the requirements of this recommendation."
She later added: "In terms of the work that is going to be undertaken, the risk around the actual satisfactory nature of the fire works is absolutely with the developer." A campaign group aimed at securing improved fire safety in buildings across Wales, Welsh Cladiators, said it found the move to offer an interest free £20 million fund to developers "astonishing".
A statement from Welsh Cladiators states: "We remain deeply concerned that the Welsh Government's "collaborative" approach with developers is naive and fails to provide any real legal protections. The role of government is to legislate not negotiate with rich commercial enterprises who have shown themselves reluctant to do anything for years.
"We believe that the Welsh Government has failed to take on board the daily experiences and realities of victims when it comes to dealing with such businesses." The Welsh Government's Development Pact commits companies which are signed up to it to addressing fire safety issues in buildings of 11 meters or more in height which were built over the last 30 years.
A Welsh Government spokesperson said: "In Wales, we want works to take place as quickly as possible and our £20m Welsh Building Safety Developer Loan Scheme has been made available to ensure there are no reasons for developers to delay works due lack of available capital. All developers who signed our Pact have either signed up to our contract, or confirmed they have no buildings in scope. This is not the case in England, where a legislative approach has been taken."
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