Gove launches scheme to penalise housebuilders for non-payment of building safety costs

A scheme designed to effectively stop major developers from trading if they fail to undertake the fire safety repair work deemed necessary by the government has come into force after regulations were finally published yesterday.

The Responsible Actors Scheme has been designed by housing secretary Michael Gove to enforce his plan to get major builders to sign up to a contract committing them to remediate any “life critical” defects in buildings going back 30 years, in the wake of the Grenfell Tower tragedy.

So far, 46 of 50 developers approached by the government to join the Responsible Actors Scheme have signed the contract, with four firms – Abbey, Avant, Dandara, and Rydon – so far not signing the contract.

Under the terms of the scheme, confirmed yesterday in regulations published online, developers invited to join but who do not comply with the terms of the RAS can be blocked from receiving building control sign off on development and from building out planning permissions. The legal powers for the RAS are contained in Section 126-129 of last year Building Safety Act.

An explanatory note published alongside the regulations printed yesterday said: “Developers who are eligible for the scheme but who elect not to make the important commitments set out in the developer remediation contract, or who fail to comply with its terms, should expect to face significant consequences […] they will be prohibited from carrying out major development and gaining building control sign-off in England”.

It added that legal commitments to repair buildings by the 46 developers to so far sign the contract are understood to be worth more than £2bn. The explanatory note also confirmed the government’s intention to expand the scheme to other builders once it is up and running. It said: “The developer self-remediation approach, and the RAS, is to be expanded over time to cover other developers who developed or refurbished defective 11m+ residential buildings and should pay to fix them.”

>>See also: It’s time for Gove to stop throwing stones at the housing sector

>>See also: Are we ready for the new Building Safety Regulator?

>>See also: What Gove’s Responsible Actors scheme is likely to mean for building safety

The idea is that the powers in the RAS will be enforced by local councils, who will be able to block developers from building out schemes where they have failed to sign the remediation contract when asked to by government.

The regulations published yesterday state they come into force “the day after they are made”, meaning the scheme is in force from today. This means that councils will from today technically have the power to block the four housebuilders yet to sign the contract from carrying out development.

Housing Today earlier this month reported that both Dandara and Avant are understood to be in the final stages of signing the remediation contract, with only Rydon so far having indicated it does not want to sign the document. Housebuilder Abbey has so far not responded to requests to comment.

Home Builders Federation executive director Steve Turner said the RAS provided the Government with “unprecedented powers” over UK businesses, allowing the housing secretary to “keep a list of companies he approves of”.

He said: “Such powers have clear implications for investor confidence, not only for this sector but for the international view of the UK as a place to invest. Government needs to ensure the powers are used proportionately and not as another anti-business stick to support an increasingly anti-development agenda. The Building Safety Act gave ministers powers to use the RAS to enforce against other parties, such as multinational product manufacturers and foreign developers but to date ministers have only chosen to target British house builders”.