Committee to probe whether cladding costs should fall on housebuilders alone

The chair of the levelling up and housing select committee has said an inquiry into Michael Gove’s plan to force housebuilders to pay £4bn in cladding repair costs will consider whether others should also be asked to pay up.

Clive Betts told Housing Today that “there is a view” that the responsibility for paying for fire safety repairs should be widened, and that the inquiry, announced earlier this week, into the housing secretary’s plan will consider this issue, among others.

Betts’ comments to Housing Today come as the issue of who exactly pays the mooted £4bn in costs to repair homes of between 11-18m has already emerged as a key issue in talks between Michael Gove and housebuilders to find a way forward.

Gove last week scrapped a plan to force leaseholders to take on personal loans to pay for the cost of cladding repairs, saying that instead he expected housebuilders to cough up the expected £4bn bill.

However, housebuilders, who are already being hit with a £2bn tax to pay for repairs to taller buildings, say that they alone shouldn’t bear the cost of the failure, which should be shared with other developers, contractors, designers, product manufacturers and the government.

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Betts said the committee welcomed Gove’s decision to stop leaseholders bearing the cost of repairs, but that there remained very little detail as to how exactly the new plan will work.

He said: “There is a view that the scope of responsibility for paying for cladding repairs should be widened, particularly to the likes of product manufacturers and insurers. What steps did they take to ensure homes were safe?

“We will be considering this issue.”

The select committee inquiry follows the leaking of a Treasury memo to the housing department, which makes clear that while Gove has been authorised to use the threat of introducing a tax on developers to force them to negotiate, no decision has been made on whether a tax would be approved, and that in the meantime, the liability for the repair costs rested with the department’s existing budget.

“We need to probe how this commitment from Gove will be put into practice,” Betts said, “we haven’t so far had any explanation of how this is going to work.”

“I think the industry should be held to account, but we want to probe exactly how. What happens, for example, if the industry says no? to voluntary contribution. It seems the department will have to find the funding within its own budget – and that means cuts to the social housing programme as it’s its only significant spending stream.

“If so, that is going to have real consequences”.

The leaked Treasury memo makes clear that the department will be expected to prioritise spending on fire safety issues above promoting new housing supply.