Building Safety Levy (Scotland) Bill: island communities impact assessment

Objectives

This Island Communities Impact Assessment (ICIA) considers the impacts of the Building Safety Levy (Scotland) Bill, which will introduce the Scottish Building Safety Levy (SBSL) – a revenue-raising measure to generate funds to support the Scottish Government’s Cladding Remediation Programme.

The Grenfell Tower fire tragedy in London in June 2017 highlighted concerns about the safety of medium and high-rise buildings with external wall cladding across the UK and demonstrated the need to take action to remediate buildings with unsafe cladding.

The Housing (Cladding Remediation) (Scotland) Act 2024 was introduced by the Scottish Government to facilitate the delivery of its Cladding Remediation Programme, which aims to identify, assess, and address the safety risks of buildings within scope of the Programme.

Funding cladding remediation presents a shared challenge across all the governments in the UK. In order to meet associated costs in England, the UK Government legislated through the Building Safety Act 2022 for the introduction (through secondary legislation) of a Building Safety Levy on the development of new residential buildings.

The UK Levy will only apply to developments in England, meaning that the Scottish Government will receive no consequential funding from its introduction. This creates a gap in the funding options available to address cladding remediation in Scotland.

The Scottish Government set out in its Programme for Government 2024-25 a commitment to introduce an SBSL to support the funding of Scotland’s Cladding Remediation Programme, following the devolution of the necessary powers which was finalised on 19 December 2024.

The SBSL will be charged on the construction of new residential buildings in Scotland, with an estimated revenue target of £30 million per annum. The Bill proposes that the SBSL will apply to:

• New homes built by developers for onward sale
• Purpose built student accommodation and build-to-rent
• The redevelopment of existing buildings for the purposes of providing new or additional accommodation, irrespective of whether the existing building’s current or past purpose is/was for non-residential use

The Bill also proposes that the following types of buildings are outside of the scope of the Levy:

• NHS Hospitals, NHS Medical Centres and NHS GP practices
• Non-NHS hospitals and hospices
• Supported Housing, Residential Care Homes, Children’s Homes
• Conversions, improvements to owner/occupied homes and refurbishments
• Refuges and residential domestic abuse facilities for example, rape crisis centres
• Criminal Justice Accommodation
• Military Barracks and other Military establishments (including accommodation provided for military personnel and their families by or on behalf of the Ministry of Defence)
• Hotels, hostels and similar establishments
• Monasteries, nunneries or similar establishments
• Seminaries and other religious colleges which include accommodation
• Drug and/or alcohol treatment centres
• Temporary accommodation for homeless people
• School premises to be used for the sole or primary purpose of housing its students
• Social and affordable housing designated at completion
• All housing constructed on islands