Explainer: Are Michael Gove’s threats to developers working?
This morning, we broke the news that residential developer Telford Homes was ready to sign Michael Gove’s cladding pledge. Just hours later, the developer officially capitulated and signed.
These developments indicate that Gove’s threats, after all, are working. Monday was the official deadline for signing the legally binding contract. Thirty-nine developers accepted their responsibility to fix fire-safety defects in buildings more than 11m high that they built or refurbished.
Gove has reiterated multiple times that those who don’t sign will “not be able to operate freely in the housing market”. This means they will effectively be banned from building new homes. “Your investors will see that your business model is broken”, threatened Gove.
Yet there were still eleven – now ten – developers who had not given in by Monday, including Lendlease and Galliard Homes. Some blamed it on the Department for Levelling Up, saying they weren’t given enough time to consider all the options and that the paperwork didn’t arrive on time. Others said they were too small and it was unfair they were made to pay like the industry giants. Others, perhaps wisely, chose silence.
The government’s pledge is Gove’s big weapon against an industry that failed to take the necessary measures to fix a cladding crisis sweeping the country in the wake of the Grenfell tragedy.
It’s fair to say the blame for the cladding crisis doesn’t rest solely with them: it was the government who drafted loose regulations for the industry and turned a blind eye to the problems. It emerged during the inquiry into the fire at Grenfell Tower that companies selling the cladding were aware of its dangers.
Yet as things are now, it is developers who have to pay, and the pledge forces them to cough up collectively £2bn for reparation works. It was initially meant to be a voluntary pledge, but Gove upped the game after campaigning from action groups and leaseholders. On top of these £2bn, Gove plans to raise £3bn through the Building Safety Levy, which will be expanded to apply to all new buildings that require building control approval.
Over the next months, the fight between Gove and the developers will take a new shape as the obstinate ten weigh their options. Campaign group End our Cladding Scandal has urged the government to step in and ensure buildings are safe even when the developers won’t pay. Gove will do everything in his power to avoid such a scenario.