Government outlines ‘legally binding’ building safety commitments for developers

The new provisions will cover developers that make profits of more than £10m per annum. They will remain in the scheme until the completion of all remediation work on all buildings that are over 11 metres tall and that have been built or refurbished within the past 30 years.

The two key commitments at the start of the agreement promise to make financial contributions to cover the cost of remediation of cladding in all residential and mixed-use buildings, and to fund and undertake all necessary remediation work in relation to buildings that the developer played a role in developing or refurbishing.

To do this, developers must “investigate and remediate buildings found to have issues without delay”, “bear the costs of these works” and audit and review of the standard of this work.

Reports on the progress of works, the timeline for completing works and steps taken to identify further buildings with issues must be issued to DLUHC.

The agreement also calls for the developer to reimburse the government for any of the government’s previous Building Safety Fund money, which would now come under the scope of this new scheme.

Developers will be expected to provide an initial “float amount” to cover the cost of the first year of the scheme, and then contribute annually after that point.

Those who fail to pay or are found to be carrying out avoidance tactics will be deemed non-compliant.

In his letter, Mr Goodman writes that these companies could be subject to further steps, to ensure that “only participants in this market are those who have committed to resolving this crisis”.

The letter also states that the government is currently engaging with product manufacturers around what level of contributions they will be forced to make to help fix the crisis.

Developers have now been asked to give feedback on the document and share their views on the best way to apportion costs, how best to structure the fund and how best to approach the work, focused on critical life safety first.

The letter comes after Mr Gove set out his plans last month to try to fix the building safety crisis. In a speech to parliament he guaranteed that no leaseholder living in their own flat would have to pay a penny towards cladding remediation, and would instead make wealthy developers and companies pay to fix the crisis.

On the day of the announcement, he sent a letter to developers outlining a new deal with the industry which would see the developers commit to rectifying buildings and make financial contributions to a new £4bn fund dedicated to the remediation of buildings between 11 and 18 metres.

The first roundtables between Mr Gove and developers took place last month but the plans have been met with some resistance by the developer sector. On Monday, David O’Leary, policy director at the Home Builders Federation, said that the March deadline that Mr Gove had set for an agreement was “extremely challenging” and questioned whether the cost of this remediation would be £4bn.

Giles Grover from End Our Cladding Scandal said: “It is positive to see Mr Gove attempting to use the levers at his disposal to force them to finally play ball and properly help the innocent leaseholders they have ignored to date.

“We keenly await the detail of how this new approach is intended to work, especially the implications for residents in buildings who have been waiting for over 18 months for news on if they may be eligible for funding.

“And what of the buildings where agreements have been, or are close to, being signed? Will the range of non-cladding defects now be covered through this approach?

“We also have not forgotten, and will not forget, residents in under-11-metre buildings, who remain ruled out of any help whatsoever.

“Should the developers continue to push back, we urge Mr Gove to carry through the threats he is making – ultimately, this collective state and industry failure demands a collective state and industry approach.”