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Managing Editor, IFSEC Insider

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James Moore is the Managing Editor of IFSEC Insider, the leading online publication for security and fire news in the industry.James writes, commissions, edits and produces content for IFSEC Insider, including articles, breaking news stories and exclusive industry reports. He liaises and speaks with leading industry figures, vendors and associations to ensure security and fire professionals remain abreast of all the latest developments in the sector.
April 13, 2022

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Building safety

Government announces £5 billion agreement towards the building safety scandal to come from major housing developers

An agreement between the Government and 35 major developers will see £5 billion committed from industry towards addressing the building safety scandal, the Department for Levelling Up, Housing and Communities (DLUHC) has announced.

Cladding-CBCK-Christine-AlamyStock-22£2 billion of this has been committed directly from the 35 developers to fix their own buildings, while the remaining £3 billion will come from an extension to the Building Safety Levy, which the department says will “force industry to pay and protect innocent leaseholders”.

Under the new agreement, which will become legally enforceable, the homebuilders have pledged to fix all buildings over 11 metres that they have played a role in developing in the last 30 years.

For the companies yet to make the pledge, the Secretary of State has also confirmed there is little time left for them to sign up, and that those who continue to refuse will face consequences if they fail to do so.

As set out in January, a new government scheme will also see industry pay to fix buildings where those responsible cannot be identified or forced to in law. This follows previous confirmation that plans for a 30-year loan scheme paid for by leaseholders would be scrapped.

The new scheme will be funded through an extension to the Building Safety Levy that will be chargeable on all new residential buildings in England. This is expected to raise up to an additional estimated £3 billion over 10 years from developers.

You can find the list of developers, including Berkeley, Persimmon, Taylor Wimpey and more from the Government website, here. 

New proposed laws, announced in February under the Building Safety Bill, will ensure qualifying leaseholders are protected from the costs of historical building safety defects, including total protection against cladding costs.

Levelling Up Secretary Michael Gove said: “Today marks a significant step towards protecting innocent leaseholders and ensuring those responsible pay to solve the crisis they helped to cause.

“I welcome the move by many of the largest developers to do the right thing. But this is just the beginning. We will do whatever it takes to hold industry to account, and under our new measures there will be nowhere to hide.”

The pledge commits developers who have signed up to legally binding contracts, and to implement their promises as soon as possible.

According to the DLUHC, the detailed agreement confirms developers will:

  • Act as quickly as possible to fix buildings
  • Implement new proportionate guidance on building safety
  • Regularly report to leaseholders and government on their progress
  • Respect an independent dispute resolution process established by government; and
  • Refund money already received from the taxpayer to fix their buildings.
  • More information on how government plans to enforce the agreement in law will be released in due course.

The Government is introducing new powers that could be enforced on a developer should they breach the agreement, as well as on any remaining companies who fail to sign up. These new powers would allow the Secretary of State to block those who refuse to sign from building and selling new homes.

The Government has also noted that cladding and insulation manufacturers are yet to accept their share of responsibility and come forward with a proposal. The Secretary of State has also written to the Construction Products Association and warned he will do whatever it takes to hold cladding and insulation manufacturers to account.

What is the Building Safety Levy?

Placed under Clause 57 of the Building Safety Bill, the Building Safety Levy is a new levy on developers, which is designed to contribute towards fixing historical fire safety defects such as unsafe cladding.

It applies to developers making an application to the Building Safety Regulator for building control approval – the new Gateway Two process to be introduced in building regulations, which takes place before building work starts. Those covered within Gateway Two will be residential buildings or care homes over 18m or seven storeys – with subject to exclusions.

The levy rate has yet to be confirmed at the time of writing, with an ongoing consultation process designed to assess this, though it may vary over time.

Find out more about the Building Safety Levy, here.

 

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