Michael Gove’s strategy to tackle the cladding crisis proved deeply unpopular with the housebuilding industry.
In the wake of Gove’s sacking, some had hoped his successor would take a different view, yet those notions were dashed by the news that new housing secretary Greg Clark has issued formal contracts to Britain’s major housebuilders.
The contracts intend to secure developers’ commitment to remediate ‘cladding scandal’ buildings and give the industry just four weeks to sign and agree to the terms. Housebuilders now have a very short window in which to digest the contents of the contract and ensure they are comfortable with the timetable and the terms. The reality is that the whole country is watching closely, expecting them to ‘read the room’ and sign up.
There has been some criticism of the documents that secure grant funding for cladding replacement schemes, and it remains uncertain whether the government really intends to draw upon the contracts as anything more than a safety net. However, on paper, they are strict.
Developers will now need to get into the detail of the documents, appraise the contents carefully and understand what it means for their business as quickly as possible. Unfortunately, failing to sign on the dotted line is certain to incur reputational damage and draw the ire not only of the government but also of industry peers, affected leaseholders and potential buyers.
Furthermore, should the industry reject the government’s demands, we could well see the introduction of legal powers to force developers to stump up the funding. Avoidance is also likely to lead to operational challenges.
Gove previously outlined the potential for new powers to prevent housebuilders from receiving planning permission for future schemes. While he may no longer be pulling the strings at the Department for Levelling Up, Housing and Communities, it is clear the government will continue to push ahead with its plans to tackle the cladding crisis, with developers footing what ministers see as their fair share of the bill.
Andrew Rimmer is a partner and head of construction at JMW Solicitors