If you ever have an issue in Government and you don’t know what to do about it, conventional wisdom is to give it to Michael Gove. Famed for being considered a master ‘fixer’, the new Secretary of State for Levelling Up, Housing and Communities has a lot of issues in his in tray – from defining his own job title and delivering the elusive levelling up white paper to providing the homes the country needs – but not many are more sensitive or pressing than the cladding crisis. The Government are under huge pressure to resolve this issue and restore the trust of many who (whether its perception or reality) do not feel safe in their own homes or are facing crippling bills for cladding remediation.
This is an issue which ultimately affects wide cross sections of society, whether you’re a freeholder, leaseholder, local authority, manufacturer or a developer – and that is the line that Mr Gove and colleagues have to be tread. So, what is the Government doing about this?
In a self-described “bold new plan” the Government say they are ‘protecting leaseholders’ by ‘making wealthy developers and companies pay to fix the cladding crisis’. Essentially, the industry has been given two months to agree a new plan on how to fund the costs of remediation (fixing unsafe cladding) which is currently estimated to cost £4 billion. This will replace the current proposed loan scheme and Gove says it will ensure no leaseholder will face any costs to fix dangerous cladding as the fee will fall on developers and cladding companies instead.
Whilst many leaseholders will see it as a positive step forward, relieving their fears about racking up potentially life changing bills, the proposals lack the necessary detail to give full confidence that a lasting resolution is imminent. We are 4½ years on from the horror of Grenfell and to date the government has yet to come up with a solution – so to expect the industry to do so in just two months seems a bit rich.
Developers and builders will reasonably respond that they installed materials that passed government safety regulations at the time. And the reality is this is fiendishly complex. Many developments are carried out by SPVs with a combination of investors, managers and owners – both domestic and international. And many are ‘sold-on’ once development is complete. Tracking down and identifying the one responsible for remediation is no straightforward task.
In reality, Michael Gove’s tough talk has three audiences. He wants to show the public he is taking fresh action. He wants to pressure the industry into doing more. But perhaps most important to him he wants to show the Treasury that he is using every stick and rattling every cage in order to extract cash from the industry. He knows this will not raise enough to fund all the remediation – but if Treasury believe he has done everything possible then his chances of getting the balance of the funding required from their tight coffers are much improved. Few policies are everything they seem to be, and that’s certainly the case here.