FMJ Facilities Management magazine providing industry-specific intelligence to FM and property professionals
The government has revealed a wide-ranging agreement that will see industry contribute £5 billion to fund building safety repairs.
In a victory for leaseholders, Levelling Up Secretary Michael Gove has agreed a solution with the housing industry that will see developers commit a minimum of £2 billion to fix their own buildings. Industry will also pay up to a further £3 billion through an expansion to the Building Safety Levy.
Under the new agreement, which will become legally enforceable, over 35 of the UK’s biggest homebuilders have pledged to fix all buildings 11 metres+ that they have played a role in developing in the last 30 years.
For the companies yet to make the pledge, the Secretary of State has also confirmed there is little time left for them to sign up, and that those who continue to refuse will face consequences if they fail to do so.
As set out in January, a new government scheme will also see industry pay to fix buildings where those responsible cannot be identified or forced to in law. This follows previous confirmation that plans for a 30-year loan scheme paid for by leaseholders would be scrapped.
The new scheme will be funded through an extension to the Building Safety Levy that will be chargeable on all new residential buildings in England. This is expected to raise up to an additional estimated £3 billion over 10 years from developers and ensure no leaseholder in medium-rise buildings faces crippling bills, even when their developer cannot be traced.
New proposed laws, announced in February under the Building Safety Bill, will ensure qualifying leaseholders are protected from the costs of historical building safety defects, including total protection against cladding costs. This new agreement establishes that the industry responsible – not innocent leaseholders – will pay.
The pledge published by government commits developers who have signed up to legally binding contracts, and to implement their promises as soon as possible.
The detailed agreement confirms developers will:
- Act as quickly as possible to fix buildings
- Implement new proportionate guidance on building safety
- Regularly report to leaseholders and government on their progress
- Respect an independent dispute resolution process established by government; and
- Refund money already received from the taxpayer to fix their buildings.
The government is introducing new powers that could be enforced on a developer should they breach the agreement, as well as on any remaining companies who fail to sign up. These new powers would allow the Secretary of State to block those who refuse to sign from building and selling new homes.
The government is clear that building safety is an industry wide issue, and says cladding and insulation manufacturers are yet to accept their share of responsibility and come forward with a proposal. The Secretary of State has also written to the Construction Products Association and warned he will do whatever it takes to hold cladding and insulation manufacturers to account.
To see the full list of developers who have signed building safety repairs pledge click here.
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