Developers could try to ‘shield themselves’ from responsibility of cladding costs, Michael Gove warns

Building owners and developers could use legal action to try to avoid paying remediation costs for buildings with unsafe cladding and other fire defects, the housing secretary has warned.

Michael Gove told the Levelling Up, housing and communities select committee that if the government can’t show it is taking a “proportionate approach” to holding developers responsible they could launch legal action to “shield themselves”.

What is the government’s solution to the cladding crisis?

The government is currently moving forward with plans to address the injustice faced by leaseholders across the UK stuck in unsafe, unsellable houses, due to a litany of fire safety defects.

The government has announced its intention to protect the vast majority of leaseholders from the cost of remediation related to external cladding.

A series of amendments to the Building Safety Bill introduced by the government last week will prevent leaseholders paying for cladding costs, and limit the amount they spend on non-cladding to £15,000 in London, or £10,000 in the rest of the country.

However, MPs raised concerns that non-cladding issues are being treated as a separate issue despite ‘dwarfing’ issues related to cladding.

Michael Gove, secretary of state for Levelling Up, Housing and Communities, said that the government is taking a ‘triage approach’ to the building safety crisis, with external cladding the immediate priority.

He said: “The biggest risk, the greatest potential catastrophic risk comes from unsafe cladding material, but that is certainly not the only fire safety risk.

He said that the government has plans covering cladding costs on high-rise and mid-rise buildings, but that “when it comes to other costs” the responsibility will be put on the freeholder, usually the owner of the block of flats or building, to pay.

Gove said the government will “pursue them as far as we can” but added that  “it may not be possible to get all of the resources that we need”.

‘We have a responsibility here’

Campaigners have long argued that the government’s initial approach to the issue was unfair toward those affected by non-cladding issues, with no support outlined initially.

And while the amendments proposed last week by the government have been broadly welcomed by leaseholders, there are still some concerns about non-cladding costs.

Asked who would then meet any further costs if there was a shortfall after leaseholders contribute the capped amount, Gove said the responsibility is ultimately the government’s.

“But,” he added, “what we’re seeking to do is ensure we can pursue those who do have a direct responsibility.

“But, and the Chancellor will probably shiver for me to say so, we have a responsibility here.

Asked by MPs why developers weren’t being pursued in the same way for non-cladding costs and with those related to cladding, Gove said that legal advice suggested it could leave the legislation open to challenge.

He said: “Our legal advice is that, if it were the cast that a building owner were to challenge our legislation and we had not shown that we were taking a proportionate approach they might have more chance of potentially shielding themselves from these consequences.”

The session also saw Gove admit that the government could struggle to compel foreign developers to contribute toward the costs of remediation, even for cladding-related issues.

Gove also all-but ruled out asking insurance companies to contribute toward the Building Safety fund, following a letter from Treasury secretary Simon Clarke which seemed to prohibit this as an option.