Housing Secretary Michael Gove and UK Developers nearing Deal to Resolve Building Safety Crisis

Planning a construction project

The Grenfell Tower fire, that took the lives of 72 people, highlighted the numerous fire safety issues in the industry. Since then, the government has introduced various reforms to promote more safety, accountability and transparency in the industry. Recently, Housing Secretary Michael Gove has been in talks with developers to resolve a huge part of the building safety crisis. He is urging UK developers to allocate more funds for the remediation work of mid-rise buildings between 11 and 18 metres tall that have unsafe cladding in their external wall systems.

According to estimates released by the housing department, the fire-safety remediation work for mid-rise building blocks in England will cost around £4bn. In order to address these safety issues, Gove has asked developers to pay for these costs, in addition to an annual levy meant to go towards the repairs of buildings over the height of 18 metres.

Last week, several developers announced that they had signed the pledge committing to fix fire-safety issues that pose a risk to life in medium and high-rise buildings built by them over the past 30 years. The developers who signed the pledge included Crest Nicholson, Taylor Wimpey, Persimmon and Berkeley Group, some of the largest UK builders.

Crest Nicholson said that they would be setting aside between £80mn and £120mn for any mid-rise building that required fire safety remediation work. They were the first builder to announce that they had signed up to the pledge. Taylor Wimpey announced that by signing up to the pledge they would have to incur additional costs of £80mn on top of the £165mnthat they had initially set aside for the fire safety work. Persimmon, on the other hand, said that they would be able to cover the remediation work for mid-rise blocks with fire safety issues built in the past 30 years with the funds from the £75mn that they had already set aside previously. Berkeley did not disclose their internal estimate cost for their fire safety remediation work. This progress was welcomed by the government, which recognised that there was a lot more to be done to solve the cladding crisis. 

In order to get more developers to sign the pledge, Michael Gove has threatened developers who do not take responsibility and act to resolve the cladding crisis in the country by stalling the amendments to the Building Safety Bill. These amendments will prevent developers from obtaining the required planning permission or approved building regs. Additionally, they would not get access to future government housing funds. However, these measures can only be implemented once the Building Safety Bill receives royal assent, which is expected in 2023.

Earlier this month, developer Bellway said that their estimates suggested that the remediation costs of mid-rise buildings could almost triple from the £187mn that they had initially set aside. However, they did not release actual numbers about the new estimated costs.

The government has also initiated discussions with the Home Builders Federation (HBF) over a plan to carry out remediation work on buildings between 11 metres and 18 metres in height. While the two parties are still in discussion about the plan, the £4bn cladding remediation fund is not being discussed at the moment.

Another issue that has not been resolved yet with regards to the developers who have gone bust or are untraceable. There has been no clear indication on who would be responsible to pay for the fire-safety remediation works on these buildings.

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