Lack of clarity over cladding remediation payment plans

Communities secretary Michael Gove has said that developers had the principal responsibility to pay for cladding costs but could not clarify how the government would assess a freeholder’s ability to afford the costs.

Gove was questioned in Parliament on Monday over the recent proposals to the Building Safety Bill which would see freeholders billed for the cost of cladding remediation on building, and what impact that could have on “low-capitalised” firms.

Gove reiterated that the government would do everything it could to make companies pay. However, he failed to confirm if there would be any formal assessments to ensure that a company could afford cladding costs.

He said that the responsibly to furnish funds stayed with these companies if they were “corporate institutions” and had taken up a freehold “thinking that they can make a profit from it”.

The Levelling Up, Housing and Communities Committee also challenged Gove’s singular focus on asking developers to contribute towards cladding costs and why product manufacturers were not included in the collective contribution towards the government’s £5.1bn Building Safety Fund (BSF).

He was also asked if manufacturers, like developers, would need to provide details of cladding projects going back 30 years.

Gove said that talks were ongoing with the manufacturing industry, and added: “We wanted to eat the elephant in chunks, and we wanted to deal with it stage by stage.” He said that the most important thing to do was to speak with developers.

Similarly, the Committee also asked why warranty providers who attested to a building’s safety were not included like developers, to which Gove said it was not being ruled out, but again pointed to the responsibility of developers.

The questioning also revealed a lack of clarity on the role of foreign developers or housebuilders that were not domiciled in the UK and how enforceability of building safety proposals would work.

Gove said that the government did not want to “show too much of their hand” about the levers in place but admitted that it would be easier to hold local companies accountable.

The Building Safety Bill is currently in Parliament and is expected to be implemented in 2023. In January, Gove wrote to the construction industry asking developers to contribute towards £4bn of cladding costs on buildings between 11-18 metres. The fund would be on top of the government’s £5.1bn Building Safety Fund (BSF), which is for taller buildings.

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