A leaseholder caught up in the cladding crisis protests in July 2021. Image: Reece Lipman
Homebuilders will pay up to £5bn to remove dangerous cladding from buildings in England as part of the Westminster government’s bid to end the building safety crisis.
Levelling Up Secretary Michael Gove announced on Wednesday that he had agreed a deal with developers that would see them contribute at least £2bn to fix their own buildings.
Housebuilders also agreed to pay up to £3bn over the next 10 years through the expanded building safety levy to cover buildings where the original developer cannot be traced. The move extends the levy to buildings of all sizes.
The cabinet minister had previously given developers a March 31 ultimatum to come up with a funding plan to contribute £4bn to fix homes, threatening to take legal action if an agreement could not be reached.
Gove said: “Today marks a significant step towards protecting innocent leaseholders and ensuring those responsible pay to solve the crisis they helped to cause. I welcome the move by many of the largest developers to do the right thing.
“But this is just the beginning. We will do whatever it takes to hold industry to account, and under our new measures there will be nowhere to hide.”
Leaseholder campaign group End Our Cladding Scandal said the announcement was a “welcome step in the right direction”.
A spokeperson for the group said: “Much depends on how the principles announced today translate into action building by building. Today’s agreement calls for intensive supervision by the government. If that does not happen then this agreement will not work.
“We need to see rapid action on this. Until buildings are fixed people will still be paying for waking watches and higher insurance premiums. That is money they will not get back, even with today’s announcement.
“There is still work to do to ensure all buildings are made safe and funding gaps are covered.”
As well as the funding commitment, the government also announced that 36 developers have signed a building safety pledge to carry out works on buildings over 11 metres that have played a role in developing or refurbishing over the last 30 years.
Developers have agreed to act as quickly as possible to fix buildings as well as implementing new guidance on building safety and regularly reporting progress to government and leaseholders through the pledge, which ministers said will be legally enforceable.
The pledge also demands developers “respect an independent dispute resolution process” established by the government and refund money already received from the taxpayer to fix their buildings.
Major developers Persimmon, Redrow, Ballymore and Taylor Wimpey have signed the pledge and the government remains in talks with other firms having asked 53 homebuilders to take the commitment.
However, ministers warned developers who refuse to sign up to the pledge will “face consequences”.
A spokesperson for the Home Builders Federation told The Big Issue developers support the government’s stance that leaseholders should not have to pay to fix buildings, but they called on ministers to ensure other responsible parties contribute too.
The government said cladding and insulation manufacturers are “yet to accept their share of responsibility and come forward with a proposal”.
“Any further levy is not proportionate and poses a serious threat to businesses, jobs, investment in new sites, housing supply and affordable housing provision,” the HBF spokesperson said. “Government must act to make other responsible parties pay their share and not take the easy option of targeting UK builders again for a problem they did not create.
“Saying ‘it’s too hard’ to get contributions from other parties is unacceptable and is an affront to UK businesses who employ hundreds of thousands and pay billions in UK taxes.”
Cllr David Renard, housing spokesperson at the Local Government Association, also called on the government to “provide the same protection to council tenants and council taxpayers as it has afforded homeowners”. Cllr Renard added that the ministers should make councils exempt from the developer levy and “fund the remediation of social housing on the same basis as private housing”.
The Building Safety Bill will return to the House of Commons next week with leaseholders planning to hold a Leaseholders Together rally in Westminster on April 20 to voice their discontent over the cladding crisis. The long-tunning issue has seen hundreds of people facing bankruptcy or homelessness since the Grenfell disaster highlighted fire safety defects across the country.