Developers told to step up to Grenfell related repair costs

The government’s response to the 2017 Grenfell Tower fire in which 72 people died has at last been announced, and there has clearly been a considerable shift in approach to how to prevent another disaster and in who should pay.

Levelling up secretary Michael Gove, the minister responsible for housing, has warned there will be “nowhere to hide” for developers who fail to “step up to” their responsibilities in funding his £2 billion repair scheme to cladding. The Grenfell Inquiry decided that unsafe cladding was a major cause of the fire spreading to the extent and as rapidly as it did.

Gove’s Department for Levelling Up, Housing and Communities has issued developers with contracts that has given them six weeks to sign up to or face “significant consequences”. The contracts commit them to pay to repair unsafe buildings over 11 metres high that were built or refurbished over the past 30 years. Under a previous Housing minister, Robert Jenrick, leaseholders in buildings between 11 metres and 18 metres high would have been responsible for repairs, trapping thousands of people in apartments that were rendered unmortgageable and unsaleable.

Under a ‘responsible actors scheme’ promised for legislation to be passed this Spring, developers who do not sign the contracts or do not comply with them will be blocked from carrying out developments and from receiving building control approval for projects.

Some 49 companies – including Barratt, Taylor Wimpey, Berkeley Group and Persimmon – out of 54 that the department approached, have announced that they will support the initiative and sign the contracts.

The change is welcome but there has been a considerable amount of foot dragging over how to respond to Grenfell. At least the Minister had the courage to admit recently that the government should have moved more quickly to increase protection – measures were proposed as long ago as 2019 – but that doesn’t help the people whose lives have been on hold due to the uncertainty the delay has caused. No date has been given for when repairs must be carried out however, so for some the uncertainties will persist for a while longer. At least tenants will be saved the expense of repairs to serious safety defects, which might have included non-cladding related faults.

A previously announced Building Safety levy that aims to raise £3 billion over the next ten years will bring to £5 billion the industry’s contribution to making buildings safe. The industry justifiably feels that the new measures fail to target overseas based developers and manufacturers of cladding materials, some of whom were found by the Grenfell inquiry to have carried out insufficient safety tests.

There is much work to be done to make the affected buildings safer. Only some 7% of flats thought to be at fire risk have been made safe. And there might be a lot of properties under 11 metres high that are not covered by this initiative. The cost of putting even the above 11 metre high buildings right is estimated at some £10 billion, much of which looks like falling on taxpayers.

Developers and housing associations are looking to recoup at least some of the remedial costs from contractors and others in the courts. A landmark ruling in July last year represented the first time financial liability for remediation costs was established in the High Court, when Essex based contractor Mulalley & Co was ordered to pay damages for removing cladding on four tower blocks in Gosport, Hampshire. Expect more court cases soon.

Nick Barrett