Developers given six weeks to sign controversial cladding remediation contract

Developers have six weeks to sign a cladding remediation contract or face being frozen out of the market.

Levelling up secretary Michael Gove wrote to all developers today with a deadline of 13 March to sign a contract pledging to remediate all the buildings they worked on which have defective cladding on them.

Developers must also fund the work.

The Department for Levelling Up, Housing and Communities (DLUHC) has been locked in discussions over the contract with developers since last July, when Gove’s predecessor Greg Clark proposed a contract to replace the remediation pledge developed by the government.

Clark and Gove (pictured), who was reappointed to his former position by Rishi Sunak in October, have repeatedly warned that any developers who refuse to sign up to the pledge risk being frozen out of the industry.

In his letter, Gove warned that he is bringing a responsible actors scheme into law, which will mean that any developers who do not sign the contract will be blocked “from commencing developments for which they have planning permission, and from receiving building control approval for construction that is underway”.  This is expected to come into force after 13 March.

Gove added that the DLUHC will “take steps to inform investors and customers of the risks arising from continuing their commercial relationships” with the offending companies, while the government will also review its own commercial relationships and frameworks once it is clear who has or has not signed the contract.

A spokesperson for the Home Builders’ Federation (HBF), which is representing developers in the talks with the government, said that housebuilders had accepted that they have “a major part to play” in remediating their own buildings.

The HBF previously argued that the contract went further than the pledge and was not clear on what level of remediation any signatory would be responsible for. While the spokesperson accepted that after negotiation the contract now “better reflects the principles of the pledge”, they said that alongside new taxes it would represent a “huge pressure” on UK business.

The HBF estimates that the new residential property developer tax, introduced last April, means UK builders have forked out £2.5bn to fix defective high-rise buildings built by foreign companies and other groups.

“Government now needs to deliver on its commitment to get contributions from the numerous other parties involved in this crisis, including foreign builders and providers of the cladding at the heart of this crisis and not to repeatedly take the easy option to target UK companies,” the HBF added.

It warned: “In the current economic climate, repeatedly targeting UK businesses will cut housing supply, damage investment and threaten hundreds of thousands of jobs.” Instead, the HBF called on the government to “be brave” and ask overseas firms to fix their own defective buildings.

Construction News understands that individual companies will decide whether to sign the contract.

Gove said in his letter that signing the contract would give leaseholders and residents across the UK “peace of mind and take a big step towards our shared goal of restoring confidence in the sector”.