finance

Bolder moves required as Michael Gove tackles building safety crisis


“Michael Gove, we want justice!” rang the chant across Parliament Square 24 hours after Boris Johnson had placed his new secretary of state for levelling up in charge of fixing the building safety crisis.

Placards at the End Our Cladding Scandal protest last month read: “No sale, no help, no future” and “Leasehold is legalised theft”. Some took hope in Gove’s reputation as an energetic problem-solver. After the prior failures of Sajid Javid, James Brokenshire and Robert Jenrick to find a solution, others were more jaundiced. When the former Conservative leader Iain Duncan Smith declared that “the developers have got away scot-free”, one heckler yelled: “Your government, you hypocrite.”

In the four years since the Grenfell Tower fire, the building safety crisis has spread like an infestation of Japanese knotweed, remorselessly undermining the security of more and more homes. It has plunged hundreds of thousands of leaseholders into a misery of potential financial ruin and safety fears. Daily, householders open new remediation bills with five and sometimes six digits. Insurance renewals soar and mortgage companies declare their homes worthless.

Now Gove is hatching his response, asking whether insurance costs can be capped and whether freeholders can be forced to pay up. These are not new lines of inquiry, and previous housing secretaries have failed to make any substantial headway with them. With leaseholders facing £10bn in what many think are unjust repair costs, and a persistent and possibly growing Tory backbench rebellion, Gove will be aware this is a national crisis that requires bolder moves.

Two sledgehammer options are available. The first is a Treasury bailout to pay for the repairs. So far the government has promised £5bn, partly funded by a new tax on developers. That is to remove combustible cladding from homes over 18 metres in height. MPs reckon the bill, when lower-rise buildings found to have dangerous cladding and faults such as missing fire breaks and faulty fire doors are included, tops £15bn. There is no sign of Rishi Sunak agreeing to that, and arguably it is unjust. Why should taxpayers fix endemic failures in the property industry?

The second is to move the goalposts and redefine what constitutes a dangerous building, and at a stroke reduce the number of homes affected. Ministers and their fire safety advisers have been developing this idea for several months. Johnson said this week: “A lot of people are living with a frankly unnecessary sense of anxiety about the homes they are living in, because those buildings are as safe as any other.” Essentially, they say there has been an overreaction, albeit one the government triggered.

The government’s advice to owners, which has stood since January 2020, is to assess “risks of any external wall system and fire doors … irrespective of the height of the building”. That triggered a wave of risk aversion from surveyors and mortgage companies that some consider disproportionate.

Jenrick, Gove’s predecessor said in July that this advice would “shortly be retired”. It hasn’t happened yet.

“The general feeling among leaseholders, especially those in blocks below 18 metres, is that this is a bureaucratic problem, not a safety issue,” said Rituparna Saha, a co-founder of the UK Cladding Action Group. There have been fires in defective apartment blocks since Grenfell and some have come close to costing lives.

When leaseholders are sent remediation bills (residents of a five-storey block in south London this month were told the bill could reach £85,000 each), they are largely unable to challenge the quotes, which raises fear of financial exploitation. One cheaper alternative could be to install sprinklers in blocks with safety problems rather than stripping back their walls. It would safeguard life but may not satisfy insurers and mortgage lenders, who care about preventing building damage too.

As well as large numbers of hardworking young adults and downsizing retirees, the building safety crisis is hurting thousands of key workers in shared ownership homes. So Gove need not fear that fixing the building safety crisis is a distraction from his main job of “levelling up”.



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