For those in industry not doing the right thing, the government will be able to block planning permission and building control sign-off on developments, effectively preventing them from building and selling new homes.
The proposals will see the industry pay to fix historical problems, freeing hundreds of thousands of innocent leaseholders from shouldering an unfair financial burden while also enforcing a common-sense approach to avoid unnecessary work.
The Department for Levelling Up, Housing and Communities says that it remains in ongoing discussions with industry leaders – who agree that leaseholders should not pay cladding removal costs – with progress being made. However, for those unwilling to make commitments, the Secretary of State has been clear he is ready to act.
Reflecting the scale of the problem, the government will also be able to apply its new building safety levy to more developments, with scope for higher rates for those who do not participate in finding a workable solution.
The government hopes to not have to use these powers; it wants responsible developers and manufacturers to operate freely and with confidence, to help deliver the homes people need. If they do not act responsibly, they must face commercial and financial consequences.
Alongside further leaseholder legal protections, courts will also be given new powers to stop developers using shadowy shell companies, which make them difficult to trace or identify who they are run by, so they can avoid taking responsibility for their actions.
If passed by Parliament, these amendments to the Building Safety Bill will be brought into law.
Secretary of State for Levelling Up Michael Gove said: “It is time to bring this scandal to an end, protect leaseholders and see the industry work together to deliver a solution.
“These measures will stop building owners passing all costs on to leaseholders and make sure any repairs are proportionate and necessary for their safety. All industry must play a part, instead of continuing to profit whilst hardworking families struggle.
“We cannot allow those who do not take building safety seriously to build homes in the future, and for those not willing to play their part they must face consequences.
“We will take action to keep homes safe and to protect existing leaseholders from paying the price for bad development.”
Cost Contribution Orders will be able to be placed on manufacturers who have been successfully prosecuted under construction products regulations. These orders will require them to pay their fair share on buildings requiring remediation. It is wrong that, until now, a manufacturer could be found guilty of misconduct but could not be charged to fix the problems they caused in selling defective products.
Amendments to the Building Safety Bill will also allow building owners and landlords to take legal action against manufacturers who used defective products on a home that has since been found unfit for habitation. The power will stretch back 30 years and allow recovery where costs have already been paid out.
New clauses will also enshrine in law the commitment the Levelling Up Secretary made in the House of Commons in January that no leaseholder living in their own home, or sub-letting in a building over 11m, ever pays a penny for the removal of dangerous cladding.
If passed by Parliament, these clauses will hugely reduce the invoices that have been sent to leaseholders for taking down cladding, in some cases for over £100,000.
The most recent provisions announced will also go further than the package outlined last month by protecting leaseholders on non-cladding costs. Under the plans, developers that still own a building over 11m that they built or refurbished – or landlords linked to an original developer – will be required to pay in full to fix historic building safety issues in their property.
Building owners who are not linked to the developer but can afford to pay in full will also be required to put up the money to do so.
In the small number of cases where building owners do not have the resources to pay, leaseholders will be protected by a cap. The cap will be set at similar levels to ‘Florrie’s Law’ which applies to some repairs to social housing: £10,000 for homes outside London and £15,000 for homes in the capital. This will limit how much leaseholders in this scenario can be asked to pay for non-cladding costs, including waking watch charges.
Any costs paid out by leaseholders over the past 5 years will count towards the cap, meaning some leaseholders will pay nothing more. The government is to carry out further consultation with parliamentarians and stakeholders before finalising this to ensure that that the right result for leaseholders is delivered.
The provisions will protect leaseholders and encourage a more proportionate approach to fixing buildings, says the government. Currently, building owners can simply pass all costs on to leaseholders, with no incentive to hold back on unnecessary remediation work that has brought misery to leaseholders.
The package, alongside the duties in the wider Bill, will create an environment for tough, proportionate action on critical safety issues while preventing cost inflation and excessive work.
The new leaseholder protections will allow those less likely to be able to pay to be fully exempted from costs.
In the small number of cases where building owners do not have the resources to pay and the developer cannot be traced, leaseholders will have a ‘Florrie’s Law’ style backstop protection, which caps how much they can be asked to pay for non-cladding costs, including waking watch charges.
Any costs paid out by leaseholders over the past 5 years will count towards the ‘Florrie’s Law’ style caps, meaning some leaseholders will pay nothing more.
The proposed government amendments are due to be debated in the House of Lords during the Committee Stage of the Building Safety Bill, which began on 21 February 2022. This involves detailed line by line examination of the separate parts of the Bill.
This is valid as of 22nd February 2022.
What you’ll get: Under the new Leaseholder and Resident Service, those living in tower blocks will have access to updates on the status of their building’s application to the government’s Building Safety Fund. This will help leaseholders to understand where their building is in the process.
The service is designed to speed up the process of removing unsafe non-ACM cladding from the highest risk buildings, forcing building owners to be more transparent, and exposing those who have failed to take action to make their buildings safe.
This is one of a number of steps announced by the Secretary of State for Levelling Up, Housing and Communities earlier this month to apply pressure on industry and protect leaseholders from unnecessary costs and delays.
Minister of State for Building Safety and Fire, Lord Greenhalgh said: “It is unacceptable that four years after the Grenfell tragedy innocent leaseholders are still living in buildings with unsafe cladding.
“Building owners are responsible for making their building’s safe, and we will no longer allow them to shirk from their duties and hide behind processes and corporate loopholes.
“Everyone – including leaseholders – has a right to know what is happening with their building and to live safely. [This] launch is a key step in providing them with both the service and the peace of mind that they deserve.”
In his landmark Building Safety reset on 10 January, the Secretary of State announced that leaseholders would no longer pay for the fixing of unsafe cladding, with building owners and industry footing the bill instead.
While the majority of building owners are already engaged with the Building Safety Fund, a £5.1 billion fund targeted at remediating unsafe non-ACM cladding on residential buildings 18m and over, a minority have yet to come forward and provide building information, leading to unnecessary delays and costs for innocent leaseholders.
Under this new service, a unique code will enable leaseholders and residents to track the progress of their building’s application through an online service, with information updated monthly. This will enable leaseholders to keep track of their building’s application and help apply pressure on their building owners if action is needed.
Leaseholders will receive a unique code from their building owners and are encouraged to contact owners if they do not receive their code, or if they have any further queries on the status of their building’s application. Many residents will also receive their codes directly from government.
To maintain the pace of building remediation and ensure the Building Safety Fund is further targeted at the highest risk buildings, the Secretary of State is currently reviewing the wider programme ahead of the next phase of funding, expected early this year.
This is valid as of 27th January 2022.
Mr Gove wrote to developers last week, giving them a deadline of early March to agree a fully funded plan of action including remediating unsafe cladding on 11-18 metre buildings, currently estimated to be £4 billion.
He warns he will take all steps necessary to make this happen, including restricting access to government funding and future procurements, the use of planning powers and the pursuit of companies through the courts. He adds that if industry fails to take responsibility, the government will if necessary impose a solution in law.
In the letter, the Secretary of State asks companies to agree to:
• make financial contributions to a dedicated fund to cover the full outstanding cost to remediate unsafe cladding on 11-18 metre buildings, currently estimated to be £4 billion
• fund and undertake all necessary remediation of buildings over 11 metres that they have played a role in developing
• provide comprehensive information on all buildings over 11 meters which have historic safety defects and which they have played a part in constructing in the last 30 years
The vast majority of 11-18 metre buildings are safe and others that do have combustible cladding may also be safe or can be made safe through effective use of existing or new fire safety measures, such as sprinklers and alarms. There are, however, a small number of residential buildings with unsafe cladding which must be addressed.
Mr. Gove says developers must take forward all necessary remediation work at pace – prioritising those with greatest risks first and in all cases finding the quickest and most proportionate solution to make buildings safe.
He calls on industry to enter an open and transparent dialogue with the government to hear their proposals, starting with a roundtable with the largest residential developers and trade bodies. The government will invite leaseholders and those affected by the Grenfell Tower tragedy to the table to discuss solutions at appropriate junctures to ensure discussions are not taking place behind closed doors.
The government will announce a decision on which companies are in scope for funding contributions following discussions with industry but expect it to cover all firms with annual profits from housebuilding at or above £10 million.
Following Mr. Gove’s letter to industry, the old proposed loan scheme for leaseholders in medium-rise flats will be scrapped, with industry given two months to agree to a financial contributions scheme to fund the new plan, otherwise, if necessary, the government will impose a solution in law.
In addition, a new dedicated team is being established to pursue and expose companies at fault and to force them to shoulder the burden of making buildings safe.
Mr. Gove revealed a 4-point plan to reset the government’s approach:
• Opening up the next phase of the Building Safety Fund to drive forward taking dangerous cladding off high-rise buildings, prioritising the government’s £5.1 billion funding on the highest risk
• Those at fault will be held properly to account: a new team is being established to pursue and expose companies at fault, making them fix the buildings they built and face commercial consequences if they refuse
• Restoring common sense to building assessments: indemnifying building assessors from being sued; and withdrawing the old, misinterpreted government advice that prompted too many buildings being declared as unsafe; and
• New protections for leaseholders living in their own flats: with no bills for fixing unsafe cladding and new statutory protections for leaseholders within the Building Safety Bill.
This is valid as of 18th January 2022.
Deputy Commissioner Paul Jennings said there are “hundreds, if not thousands” of new buildings which may be “deliberately” designed to avoid rules.
They include blocks designed to be lower than the 18 m (59 ft.) limit to be considered a higher-risk high-rise building.
The building safety minister branded efforts to “cut corners” as “shocking”.
Speaking to BBC Newsnight recently, Mr. Jennings, said: “We have got examples where we think people are deliberately designing and building their buildings below that 18-metre, six-floor threshold, because they know if they reach that threshold, they would have to put advanced and more intricate fire safety measures in.”
Mr. Jennings described these new buildings in the capital as examples of “gaming the system”.
“We are seeing around 60% of the building consultations that come into the fire engineering team and others are ones where we are going backwards,” he said.
The Housebuilders Federation, which represents housing developers, told Newsnight: “Developers meet the building regulations set by Government without exception”.
Recently, London Fire Brigade said all but three of the recommendations made by the Grenfell Tower Inquiry will be in place by 2022.
Last Monday, Michael Gove told the Housing, Communities and Local Government Committee: “We collectively – the department, some in local government, others in the private sector – failed people at Grenfell and there are people who were and still are in buildings where there is a significant risk.”
This is valid as of 22nd November 2021.
What you’ll get: After an extensive reshuffle that saw the departure of housing secretary Robert Jenrick from the Ministry of Housing, Communities and Local Government, the Prime Minister has also expanded the Ministry’s remit, and changed its name in the process.
DLUHC is headed up by Michael Gove, and now includes the delivery of the levelling up agenda and responsibility for the union. Andy Haldane has been seconded into the Department in charge of a new levelling up taskforce. He was previously at the Bank of England and had only recently departed to head up the RSA.
Expanding the large policy role even further, Michael Gove will also have responsibility for UK governance and elections and takes on the additional title of Minister for Intergovernmental Relations, leading co-ordination with the devolved administration on the Prime Minister’s behalf.
Lord Greenhalgh retains oversight of fire and building safety as Building Safety and Communities Minister in the new Department, and as Fire Minister in the Home Office.
This is valid as of 27th September 2021.
What you’ll get: Proposed government legislation to simplify the planning process should work in harmony with the looming building safety changes, says the CIOB.
The institution was commenting after the Queen’s Speech last week (11 May), which introduced 30 pieces of legislation due to be passed this year, including the Building Safety Bill, Planning Bill, Procurement Bill, and Skills and Post-16 Education Bill.
Welcoming the government’s recognition of the built environment sector by placing it at the heart of the UK’s recovery from the covid-19 pandemic, the CIOB warned that with complex and overarching social, economic and environmental reforms proposed, it is essential that there is no conflict between the provisions set out in the new bills.
It called on the government to work closely with the CIOB and other built environment organisations to ensure that its proposed bills interact effectively.
Eddie Tuttle, director of policy, external affairs and research at CIOB, said: “We welcome the government’s intention to proceed with the Building Safety Bill, which outlines the first comprehensive reform of building safety regulations since their introduction under the 1984 Building Act. We believe the bill sets out a compelling vision for the future of the industry.
“However, the success of the new regime is heavily dependent on how the new Building Safety Regulator is constituted and how it operates. We encourage the government to make clear its intended timescale for the bill, to ensure that the safety of our buildings and their residents is addressed as a matter of urgency.
“The Building Safety Bill must align closely with the announced Planning Bill, which is intended to create a simpler, faster and more modern planning system, ensuring homes and infrastructure can be delivered more quickly across England.
“Although we welcome the aims of the Planning Bill, we hold concerns that planned changes to permitted development rights (PDR) – if implemented without significant safeguards – could lock in unacceptable standard development which goes against the fundamental desire to improve building quality and safety set out in the Building Safety Bill.
“We encourage the government to be clear on how it will resolve any tension between the stated aims of PDR to increase the supply of housing by lessening the administrative burden on developers, and measures set out within the Building Safety Bill to strengthen regulatory oversight. Under current proposals, buildings created under PDR are not required to pass through the Gateway One checks specified in the Bill, thus potentially undermining the rigour of the new building safety framework.”
This is valid as of 18th May 2021.
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