Raising funds to fix cladding issues

6th June 2025

Additional funding could be unlocked to fix building safety issues through new legislation published in the Scottish Parliament.

If passed, the Building Safety Levy (Scotland) Bill will see a tax charged on the construction of certain new residential properties, in line with equivalent legislation in England.

The Bill seeks to raise around £30 million per year to help fund work to fix residential buildings with unsafe cladding which have no linked developer.

Latest estimates indicate that the Scottish Government's Cladding Remediation Programme could cost £1.7 billion over a 15-year period.

Public Finance Minister Ivan McKee said:

"The Scottish Government is committed to doing what is right and necessary to address the challenge of fixing buildings affected by unsafe cladding.

"That includes putting the appropriate funding arrangements in place to ensure that the associated costs of cladding remediation do not fall directly onto affected homeowners.

“I know that developers share our determination to keep people safe and this levy will ensure they make a fair contribution to these costs, just as they will be doing in England.

“I also welcome the continued cooperation of developers who have accepted responsibility for the assessments and any required mitigation and remediation of their buildings."

Background

The UK Government agreed in principle to devolve the powers needed for a Scottish Building Safety Levy last year. Powers secured to introduce building safety levy - gov.scot (www.gov.scot)

The legislation - which is proposed to come into effect in April 2027 - includes provisions to exempt certain types of development, including social and affordable housing. Details of tax rates will be set out in regulations if MSPs approve the Bill, consistent with the arrangements for other devolved taxes.

The Bill sets out a provision for a regular review period for the levy, which will be an opportunity to consider the revenue target in light of the prevailing housing market and wider economic conditions, as well as the emerging position on the scale and profile of spending on our cladding remediation work.

Estimated costs for the Scottish Government's cladding remediation programme have also been published: Cladding remediation: capital spend forecasting - gov.scot
https://www.gov.scot/publications/cladding-remediation-capital-spend-forecasting/

Comment
Fixing Cladding issues in Scotland by a levy on builders will inevitably increase the cost of a house in the future by making new home buyers pay for the mistakes of the past.