Michael Gove’s billion-pound plan to end cladding scandal

Property developers who oppose a £4bn plan to fix fire-risk cladding on low-rise flats may be hit with new laws forcing them to act, Michael Gove will warn today.

The housing secretary’s proposed plan is designed to “alleviate the scandal that has trapped leaseholders in unsafe and unsellable homes”, said ITV News. Government grants have previously been made available for leaseholders, but thousands of homeowners who “have missed out” on the funding have had to take out “huge loans” to remove dangerous cladding, the Daily Mail reported.

‘Broken system’

Gove “has made clear that leaseholders should not shoulder the costs” of tackling the “building safety crisis”, which has “ballooned” since the Grenfell Tower fire in June 2017, said the Financial Times (FT).

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In a letter to the industry, Gove has threatened to “take all steps necessary” to fix what he described as a “broken system”.

The minister will lay out his plans during a speech in the House of Commons this afternoon. According to Sky News, Gove will warn property developers that “if you mis-sold dangerous products like cladding or insulation, if you cut corners to save cash as you developed or refurbished homes, we are coming for you”.

People living in properties above 18 metres are already able to access government grants from a £5bn Building Safety Fund. Under the new plan, developers will have to shoulder the estimated additional £4bn cost of remedial cladding costs for buildings between 11m and 18m tall, while leaseholders “will not have to pay a penny”, said the Daily Mail.

At least “116,000 flats in 7,500 blocks are expected to benefit from the plan”, the paper continued. “Forensic accountants” will be tasked with tracking down those responsible for unsafe cladding, and developers who refuse to stump up “face the prospect of swingeing new levies”. They “will also be banned by law from passing on the bill to leaseholders through inflated service charges”.

Other potential action against developers who refuse to hand over cash include “restricting access to government funding and future procurements, the use of planning powers, and pursuing firms through the courts”, said Sky News.

Gove told the broadcaster that he was prepared to “use legal means and ultimately, if necessary, the tax system” to ensure developers take responsibility for the cladding problem.

The housing secretary is setting a deadline of early March for developers to publicly agree to his plans.

‘Tentative welcome’

Campaigners have “tentatively welcomed the plans”, said ITV News. But developers have argued that “they are being unfairly singled out”, said the FT.

The Home Builders Federation (HBF), the body that represents developers, has agreed that “leaseholders should not have to pay for remediation for buildings”, adding that previous loan scheme proposals “proved to be impractical”.

But the bill should be footed by “other parties” as well as developers, the federation has argued, “not least material manufacturers who designed, tested and sold materials that developers purchased in good faith”.

Campaigners have noted that not all leaseholders will benefit from the plans.

“There is no funding” for building under 11m tall and “all other non-cladding fire safety issues”, said campaign group End our Cladding Scandal.

Shadow housing secretary Lisa Nandy has urged the government to do more to protect leaseholders from any further cladding costs.

“We must have legally binding protection for leaseholders in law to defend them from the costs of these appalling failures, a fixed deadline which will bring an end to this nightmare and a secretary of state who is able to marshal the resources and political will to take on the might of big money interests – and win,” Nandy said.