Housing secretary steps up war of words with developers
The housing secretary has threatened to prevent housebuilders from trading unless they sign up to contribute to a “voluntary” £4bn fund to pay for fire safety repairs to mid-rise buildings.
The threat to UK developers goes beyond those made by Michael Gove last month, when he first announced his plan to recoup £4bn for repairs to buildings of between 11m and 18m in height from developers.
At the time, he said he would consider using his controls over public procurement, planning powers and government funding such as Help to Buy support, to ensure developers paid in to the fund, which he put at £4bn.
Now Gove has made clear that he will consider taking steps to ensure that the “only participants in this market are those who have committed to resolving this crisis”.
The further threat is contained in a letter to “residential property developers” from a senior official at the Department for Levelling Up, Housing and Communities (DLUHC), which sets out a series of obligations which it expects housebuilders to comply with, including paying into the fund.
It says: “Those who agree to fulfil the commitments set out will continue to enjoy the benefits of the Government’s services and support on financing, procurement, planning, building control, housing investment, and industry development and leadership.
“Those who are unwilling to meet these criteria will not, and the Secretary of State has made clear he is willing to explore taking further steps to ensure the only participants in this market are those who have committed to resolving this crisis.”
Beyond paying in to the government’s remediation fund, the letter makes clear it expects developers to also pay for all the remediation work necessary on any buildings constructed by them in the last 30 years, provide detailed data returns and ensure senior officers in companies are checked as being “fit and proper persons to undertake major scale development”.
The letter does not make clear exactly who is covered by this instruction from government but last month it said it expected all developers with annual profits in excess of £10m to contribute to the remediation fund.
The decision to compel developers to pay into a fund came after Gove scrapped a scheme by his predecessor Robert Jenrick under which leaseholders of affected buildings would have been forced to take out loans to pay the cost of repairs.
His new threat follows speculation after his announcement that his initial threats of withdrawing funding would not necessarily be enough to make developers comply.
> Also read: Pay into fund or face ban, Gove tells cladding manufacturers
The letter, signed by Richard Goodman, director general of safer and greener buildings at DLUHC, does, however, make clear the government is still determining the overall size of the contribution that it is expecting developers to make, that it is willing to negotiate how to apportion costs between participants and how quickly the contributions must be made.
The letter does not say whether the government is open to taking into account money already spent by developers repairing their own properties in determining their contribution – a key ask from the Home Builders’ Federation. But it says the government “wish[es] to ensure that those developers who are committed to making a full contribution do so on a level playing field, with a clear and transparent set of commitments that developers will be expected to make”.
Gove has said he expects a deal with housebuilders to be in place by Easter, although David O’Leary, policy director at the Home Builders’ Federation, last week told MPs that this deadline will be “extremely challenging” to meet.
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