Michael Gove gives developers ‘final chance’ to pay £4bn to fix cladding crisis

Housing developers have been told to pay up to remove dangerous cladding from properties or face sanctions – but leaseholders have warned Michael Gove his £4bn plans will not end the crisis entirely.

Scores of people living in high-rise homes have been facing homelessness or bankruptcy over the costs of fixing dangerous cladding and fire defects on their properties. Ministers have been searching for a solution to the problem for years after the Grenfell disaster in 2017 uncovered a number of defects affecting buildings around the UK.

Housing secretary Gove has written to the housing industry giving them a deadline of early March to agree a fully funded plan of action to remove unsafe cladding on buildings between 11 and 18 metres in height.

“It is neither fair nor decent that innocent leaseholders, many of whom have worked hard and made sacrifices to get a foot on the housing ladder, should be landed with bills they cannot afford to fix problems they did not cause,” said Gove.

“Government has accepted its share of responsibility and made significant financial provision through its ACM (aluminum composite materials) remediation programme and the Building Safety Fund. Some developers have already done the right thing and funded remedial works and I commend them for those actions. 

“But too many others have failed to live up to their responsibilities.”

The housing secretary has vowed to “take all steps necessary” to ensure developers pay up, threatening to restrict access to government funding and future procurements as well as limiting the use of planning powers to ensure developers pay the estimated £4bn bill.

Gove has also said he will pursue companies through the courts to recover the money and the government will impose a solution in law if developers don’t pay up.

But leaseholders want the government to start issuing legal threats now to ensure developers cover the costs.

Sophie Bichener, a leaseholder in Stevenage facing bills of more than £100,000 to remove cladding and fix fire defects, said: “Leaseholders being asked nicely to pay again has not worked in the past and it could also take years to build up the funds to remediate these buildings and that means years in which leaseholders won’t be able to move or sell.

“You can’t just take the cladding off and expect the building to be safe. There’s still so many other parts of it, so many regulations that were broken. Does my building become safe just because the cladding is removed? Probably not.

“It is a positive step that this is being spoken about and there is extra funding. We really do need the developers to put their mistakes right and they have to be accountable and if that is through law then the government has to do it.”

Some residents affected by the crisis have been attempting to come up with their own legal solution to the crisis in the four-year wait for the government to solve the problem.

Steve Day, a resident at Woolwich’s Royal Artillery Quays, has been developing the Polluter Pays Bill to create a legal route for the government to “make the polluter pay” by pursuing developers for costs to fix homes.

Day told The Big Issue: “I can understand that Gove wants to give industry a final chance to make amends for the crisis it has caused.

“But it seems unlikely that they will provide the money needed and investors may prevent firms from doing so. Also no coverage for non-cladding costs is a significant gap in the government’s plan and leaves some leaseholders facing unaffordable bills.

“The Polluter Pays Bill covers both and provides a comprehensive solution for leaseholders living in flats that are defective.” 

Labour has also called for a legal solution. “Promises are no substitute for a plan. We must have legally binding protection for leaseholders in law to defend them from the costs of these appalling failures,” said Shadow Housing Secretary Lisa Nandy.

“Justice delayed is justice denied. No more excuses. The secretary of state must fix this, in full.”

Gove revealed his plans in the House of Commons following a morning meeting with leaseholders and campaigners.

The cabinet minister will scrap a proposed loan scheme to remove cladding from buildings between 11 and 18 metres with the government already committing to pay £5.1bn for remediation of buildings over that height.

He promised leaseholders will “not have to pay a penny” to fix unsafe cladding and promised to set up a new dedicated team to pursue and expose companies at fault as well as forcing them to a pay to make buildings safe.

As well as tackling cladding, Gove said £27m will be made available to install new fire alarms in a bid to prevent leaseholders from facing huge bills to cover Waking Watch schemes, where fire officers patrol properties to alert residents to a fire.

Gove’s plans also include changes to the Building Safety Bill. Changes mean leaseholders will be able to retrospectively demand compensation from building developers up to 30 years – double the 15 years currently outlined in the bill.

Meanwhile grant funding guidance will be changed to encourage subletting of Shared Ownership homes.

There was cautious optimism from leaseholder groups following Gove’s announcement, but there are still fears over funding and what the latest announcement means for people who have already paid to remediate their homes.

A spokesperson for the End Our Cladding Scandal group told The Big Issue: “Strong words, but then we have heard strong words from Ministers many times before. This government may be starting to talk tough, but these promises – finally – need to be backed by tough action, too

“Today Mr Gove promised that amendments to the Building Safety Bill, due to come before the chambers shortly, will include statutory protections for leaseholders. As always, we will be looking to the Housing Secretary to ensure his encouraging words are matched with decisive action on the ground.”

Funding concerns are also echoed by the National Housing Federation after a leaked letter revealed on Friday that no more money will be forthcoming from the Treasury.

Kate Henderson, NHF chief executive, warned solving the issue could impact social housing providers’ ability to build more affordable housing. Henderson said: “In the absence of funding, charitable housing associations have been left to pick up the bill.”

However, Gove has had his own struggles with building safety and levelling up on Monday morning. The housing secretary missed his BBC Breakfast interview slot after being stuck in a lift at the New Broadcasting House in London.

The irony was not lost on leaseholders. Reece Lipman, a leaseholder from Romford, north-east London, tweeted: “It’s incredibly frustrating being trapped and unable to move on with your life isn’t it Mr Gove? If only our problems could be solved in an hour.”