Lendlease among 11 firms facing public work ban

Lendlease is one of 11 firms set to be barred from public procurement after it failed to sign the government’s fire-safety contract.

Developers across England had until Monday (13 March) to sign a contract pledging to remediate fire-safety defects on buildings they had developed and pledge to reimburse any funds they had drawn from the £5.1bn Building Safety Fund created by the government to remediate cladding defects.

The government has now revealed that 43 companies signed the legally binding document, while 11 developers – including Ballymore and Grenfell Tower contractor Rydon – did not (see full list below).

Housing secretary Michael Gove said he would seek to bar the 11 non-signatories from public work, telling the House of Commons that he would write to public bodies to ask that they “reopen tender-award processes” where the companies had already been named on projects.

Those companies will be “out of the housebuilding business in England entirely, unless and until they change their course”, Gove added.

“They will not be able to commence new developments in England or receive building-control approval for work which is already underway.”

In a separate statement, sent to the press, Gove said: “To those developers that have failed to sign the contract without good reason, let me be very clear – we are coming after you.

“If you do not sign, you will not be able to operate freely in the housing market. Your investors will see that your business model is broken – only responsible developers are welcome here.”

The 39 developers that signed the contract, including Morgan Sindall, will be added to a new Responsible Actors Scheme, which will act as a guide to procurement bodies and other groups as to which companies can be contracted to work in England.

Their commitments mean at least 1,100 buildings will be fixed, via £2bn worth of funding, Gove said.

The creation of the Responsible Actors Scheme will mean that the 11 non-signatories – which Gove described as “neither answerable nor accountable” – will not be able to build anything.

As well as advising public bodies to prepare to reopen tender-award processes and re-run tender programmes, Gove said he would also write to investors in the dissenting firms to “explain the commercial implications of their directors’ current decisions”. In letters to local authorities and building inspectors, he will emphasise that projects should not be started or signed off.

The contract came out of a pledge to remediate buildings that was signed by 49 developers initially. Although they did sign it, the developers insisted that freeholders, developers based in foreign countries and construction-product manufacturers were also partly responsible for fire-safety defects.

In his statement, Gove said the department would “do more to pursue” freeholders and construction-product manufacturers for their contribution, as they “also bear heavy responsibility for unsafe buildings”.

“I will have more to say on this in the days and weeks to come,” he added.

Four developers that signed the contract later found out that they had developed no buildings that came under the scope of the pledge.

A spokesperson for Lendlease said: “We’ve been in dialogue with government and key stakeholders to ensure a whole of industry solution is adopted to support potential remediation works; and recently announced a £114m provision which largely relates to buildings Lendlease inherited through our purchase of Crosby Homes in 2005.

“As a responsible global developer and investor, we firmly believe companies should only be held accountable when they’ve acted irresponsibly; and we’ve been in frequent conversations with the UK Government on these issues both through the Home Builders Federation and directly.

“We’re continuing to work through the detail of the contract in the context of our global business and expect our governance processes will allow us to confirm our position by early April. The Department for Levelling Up, Housing and Communities is aware of our timeframe.

“In the meantime, we remain dedicated to a pipeline of work in the UK that is set to deliver around 34,000 new skilled jobs and nearly 30,000 new homes.”

A spokesperson for Telford Homes, one of the 11 housebuilders which did not sign the pledge, said: “Telford Homes has had constructive discussions with the UK government about the government’s proposed binding pledge contract, and we are completing the process of evaluating the terms and conditions of the proposed agreement. We are awaiting the final execution version of this agreement from the government.”