Editor, IFSEC Global

January 12, 2022

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Gove puts pressure on housing developers to help pay for cladding remediation costs

Secretary of State for Levelling Up, Housing and Communities, Michael Gove, is putting pressure on developers in the construction industry to pay to fix the cladding crises that “they caused”.

Michael Gove

Secretary of State for Levelling Up, Housing and Communities, Michael Gove

The Government currently estimates the cost of remediation of unsafe cladding on 11-18m buildings to be around £4billion, and Mr Gove has written to industry giving them a deadline of early March to agree a ‘fully funded plan of action’. He has warned he will take “all steps necessary to make it happen”, which may include restricting access to government funding and future procurements, the use of planning powers and the pursuit of companies through the courts.

He added that if the industry fails to take responsibility, the Government may impose a solution in law.

In the latter, Mr Gove has called on developers to:

  • make financial contributions to a dedicated fund to cover the full outstanding cost to remediate unsafe cladding on 11-18m buildings
  • fund and undertake all necessary remediation of buildings over 11 metres that they have played a role in developing
  • provide comprehensive information on all buildings over 11 meters which have historic safety defects and which they have played a part in constructing in the last 30 years.

The Government will announce a decision on which companies are in scope for funding contributions following discussions with industry but expect it to cover all firms with annual profits from housebuilding at or above £10 million.

In the letter, Secretary of State for Levelling Up, Housing and Communities Michael Gove says:

“Our home should be a source of security and pride. For too many of the people living in properties your industry has built in recent years, their home has become a source of misery. This must change.”

Mr Gove adds: “It is neither fair nor decent that innocent leaseholders, many of whom have worked hard and made sacrifices to get a foot on the housing ladder, should be landed with bills they cannot afford to fix problems they did not cause.

“Government has accepted its share of responsibility and made significant financial provision through its ACM remediation programme and the Building Safety Fund. Some developers have already done the right thing and funded remedial works and I commend them for those actions.

“But too many others have failed to live up to their responsibilities.”

Developers however, have pushed back on the announcement, with the Financial Times reporting that builders are claiming they have been unfairly singled out and that others, such as the Building Safety Regulator and cladding manufacturers, should also be held responsible.

The Secretary of State is also due to make an oral statement to the House of Commons announcing plans to protect innocent leaseholders, who are trapped in unsellable homes and face excessive bills to fix dangerous cladding defects. Mr Gove will also unveil a package of measures to restore common sense to the industry and end the situation of buildings being declared unsafe when they are not.

The moves come following Mr Gove’s admittance in November 2021 that “mistakes have been made” in the building safety crisis, where he also questioned why leaseholders were paying for remediation measures.

£5billion has already been committed under the Building Safety Fund by previous Housing Secretary, Robert Jenrick, to help remediate buildings above 18 metres in height – though critics argue the costs are closer to £15billion.

This article was originally published on IFSEC Global.

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