In the latest development in the complex, and very public negotiations, between the government and the Home Builders Federation (HBF), Housing Secretary Michael Gove has expressed his disappointment that the HBF have not committed to provide a comprehensive funding solution to cover the cost to remediate unsafe cladding on buildings between 11 and 18 meters high. It is understood that Mr Gove is seeking up to £4bn to cover these remedial works.
In his recent letter to the HBF, Mr Gove rejected the HBF's most recent offer where it proposed undertaking critical works on buildings it has developed, returning associated funds to the Building Safety Fund. In the absence of acceptable proposals, Mr Gove reiterated his threat to impose a legal solution through amendments to the Building Safety Bill if an agreed way forward cannot be found by the end of March 2022.
The HBF has suggested a more holistic approach to tackling the building safety crisis by suggesting an overhaul of outdated industry standards and guidance, as well as suggesting that government works closely with industry to achieve this outcome. However, Mr Gove has made it clear that he expects "full and unconditional self-remediation" without reliance on qualifications or conditions, and whilst he partially supports industry-specific reform, he emphasised the need for the HBF to suggest a plausible funding solution and make public commitments which address the remediation of fire safety defects.
Burges Salmon Comment
The HBF emphasised that home builders cannot resolve the building safety crisis on their own. We consider there is some merit in this position, and whilst the Government's desire to ensure that the "polluter pays" is understandable, there should be an acknowledgement that responsibility for the building safety crisis does not rest entirely with house builders and that other third parties (including the Government) have contributed to the situation.
We consider that threats to impose a legal solution may not be the most effective means of resolving the building safety crisis, and that by placing the financial burden primarily on the housebuilders, there is a risk that some may exit the market which could further delay urgent building safety works and may have other unforeseen consequences (e.g. exacerbating the wider UK housing crisis by stifling new residential development).
I expect developers to make public commitments. If an agreement is not reached by the end of March, I have been clear that government will impose a solution in law and have taken powers to impose this solution through the Building Safety Bill.