Michael Gove has so far persuaded housing developers to set aside more than £2bn for building safety, but questions remain over where the remainder of the £4bn target will come from.
This week Gove is expected to announce the progress of negotiations, as he attempts to untangle the crisis brought to light by the Grenfell Tower fire in 2017, which killed 72 people after flames ripped through the building’s cladding.
Gove has asked 53 developers to sign the pledge, which commits them to assess and, where necessary, fix tall blocks that they have built over the past 30 years and not tap government funds in order to do so.
He has threatened to freeze developers that refuse to sign out of the planning system and government housing funds, a contentious move that would in effect remove their ability to build.
England’s biggest builders, including Barratt Developments, Persimmon, Berkeley Group, Bellway, Taylor Wimpey and Redrow, signed up last week and committed to bump up their funding for repair work by more than £1bn, taking the total committed by listed builders to about £2bn.
Some developers have complained that Gove is going after “low-hanging fruit” but putting pressure on UK-listed companies.
The remainder are builders that have since gone bust or are untraceable, leaving behind so-called orphan buildings, and a headache for Gove.
“That is the bit that’s outstanding. I don’t think [the government] will resort to the taxpayer for orphan buildings, I expect another industry levy,” said Aynsley Lammin, an analyst at Investec.
Developers have warned the government they will not be able to build as many affordable homes if it makes them pay out another £4bn to fix dangerous cladding on buildings they were not responsible for.
At least one private developer, with a big presence in London, is unlikely to sign the pledge because the cost of repair work would be crippling, according to people familiar with the discussions.
Such a move would test Gove’s threat to cut recalcitrant builders out of the housing market, action that would require secondary legislation.
