Government Forces Developers to Fix Cladding Crisis

DEVELOPERS ARE BEING WARNED today that they must pay to fix the cladding crisis, by Michael Gove, Secretary of State for Levelling Up, Housing and Communities.

Michael Gove has today written to industry giving them a deadline of early March to agree a fully funded plan of action including remediating unsafe cladding on 11-18 metre buildings, currently estimated to cost £4 billion.

He warns he will take all steps necessary to make this happen, including restricting access to government funding and future procurements, the use of planning powers and the pursuit of companies through the courts. He adds that if industry fails to take responsibility, the government will, if necessary, impose a solution in law.

Later today, the Secretary of State is also due to make an oral statement to the House of Commons announcing plans to protect leaseholders who are trapped in unsellable homes and face footing the bills to fix dangerous cladding defects.

Michael Gove will also announce measures to end the situation of buildings being declared unsafe when they are not.

Cladding Crisis

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.

“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.”

In the letter, the Secretary of State asks companies to agree to:

    • make financial contributions to a dedicated fund to cover the full outstanding cost to remediate unsafe cladding on 11-18 metre buildings, currently estimated to be £4 billion
    • 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

Combustible Cladding

The vast majority of 11-18 metre buildings are safe and others that do have combustible cladding may also be safe or can be made safe through effective use of existing or new fire safety measures, such as sprinklers and alarms. There are, however, a small number of residential buildings with unsafe cladding which must be addressed, the government says.

The government is calling on industry to enter an open and transparent dialogue, to hear their proposals, starting with a roundtable with the largest residential developers and trade bodies. The government will invite leaseholders and those affected by the Grenfell Tower tragedy to the table to discuss solutions at appropriate junctures to ensure discussions are not taking place behind closed doors.

Housing Developers

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

The statement follows the Secretary of State ordering the suspension of Rydon Homes, who are linked to a company responsible for the refurbishment of the Grenfell Tower, from the government’s Help to Buy scheme.

Michael Gove also condemned the Mercedes F1 team sponsorship deal with Kingspan, a company connected to the crisis.

The news was welcomed by Cllr David Renard, housing spokesperson for the Local Government Association, which represents 350 councils across England and Wales. He said that it was right leasholders should not pay for the construction industry’s mistakes but warned that more help was needed for councils and housing associations to remediate unsafe cladding.

David REnnard commented: “The construction industry must also be made to fix the fire safety defects it has built into blocks owned by councils and housing associations. Unless the Government forces the industry to act – or provides funding – we are concerned that the costs of fixing social housing blocks will fall on council housing revenue accounts and housing associations.”

Following Michael Gove’s announcement, £1 billion was wiped off the value of shares of FTSE housebuilding companies, including Redrow and Persimmon.

>>Read more about the cladding crisis in the news