On 10 January 2022 the Secretary of State for Levelling Up, Housing and Communities, Michael Gove, confirmed the Government's intention to ensure that the construction industry contributed more towards the cost of remediating unsafe cladding in affected buildings. In his announcement Mr Gove invited the construction industry to contribute on a voluntary basis. However, Mr Gove indicated that he would consider using his control over access to Government funding, future procurement and planning powers in order to compel the construction industry's engagement with the proposed new process.

In a letter to residential property developers dated 3 February 2022, sent on behalf of Mr Gove, the Department for Levelling Up, Housing and Communities has expanded upon Mr Gove's previous announcement and has set out a framework to codify commitments that residential property developers with annual profits in excess of £10 million will be asked to make to ensure the remediation of unsafe cladding. Principally, these commitments require residential property developers to:

  • remediate those buildings which they themselves played a role in developing or refurbishing; and
  • provide financial contributions towards a new building safety fund which will cover the cost of safety works to all other buildings between 11 metres and 18 metres in height with critical life cladding safety defects.

The letter goes on to state that those residential property developers who agree to, and fulfil, the proposed commitments will enjoy the benefits associated the Government's services and support. However, to the extent that a residential property developer is not willing to accept these commitments, then: 

  • Government support and services will be withdrawn; and 
  • the Government will explore possible routes to exclude them from participating in the UK residential property development market.

Burges Salmon Comment

This letter appears to represent an attempt by the Government to significantly raise the pressure on UK residential property developers to "voluntarily" contribute more towards the cost of remediating unsafe cladding in affected buildings. However, it is not clear whether residential property developers will be prepared to sign up to the Government's proposed commitments or contribute towards the rectification of safety issues for which they are not responsible. It is likely that residential property developers will push for clarification of the proposed commitments and for contributions to be sought from the wider construction industry and/or the supply chains involved in residential property development.