Developers who refuse to participate in the fund set up to repair hazardous cladding will be warned this week that they may be barred from selling new homes.
Level-up Secretary Michael Gove will explicitly threaten retaliation, citing powers in the Building Safety Bill that would prevent non-cooperative developers from obtaining planning permission.
Understandably, Galliard Homes will be one of the main developers identified as a potential target for punitive measures, although other companies are expected to be identified by Gove.
Earlier this month, Gove, who was tasked by No. 10 to tackle the cladding scandal – involving thousands of tenants facing crippling bills to remove hazardous cladding – signed an agreement with 35 developers who collectively agreed to contribute 2 billion pounds for the renovation of buildings they had a role in the construction.
But some developers have not signed the alleged voluntary agreement, and Gove will step up pressure this week, reminding them that if they continue to refuse, they risk harsh sanctions under legislation that will become law.
The Building Safety Bill was introduced to create a new regulatory framework for building safety after the Grenfell Tower fire. But as he went through his final stages in the House of Lords, Gove introduced changes that would give him the power to stop companies that failed to sign his lining promise to sell homes.
Under the bill, which returns to municipalities this week and is expected to become law very soon, these companies could be blocked from obtaining a planning permission or prevented from obtaining approval for construction control.
Ministers believe that even the threat of these sanctions may be enough to deter investors. According to an internal strategy paper seen by the Sunday Times, officials say it would be “irresponsible” not to warn prospective consumers of potential risks.
Galliard is one of at least nine major developers who have not yet signed the Gove promise. They are expected to be given only a few more weeks to comply.
Over the weekend, Galliard said she acted quickly on the cladding, but that before signing the pledge, she demanded “security” from the government and “a clear and concise plan for developers, the government, the supply chain and insurers to work together to finding a fair solution ”.
According to Gove’s plan, in addition to £ 2 billion from developers to renovate their own buildings, the industry will commit another £ 3 billion to remove hazardous cladding by extending the building safety fee, the new residential building fee.
In a separate development, Gove was expected to incorporate legislation into the Queen’s speech, proposing to change the way developers are expected to finance affordable housing.
Under the current system, local authorities can impose agreements under section 106 (called section 106 of the 1990 Planning Act) on entrepreneurs, telling them that as a condition of obtaining a permit they must build a certain number of affordable housing. .
Gove wants to abandon these arrangements and instead force developers to contribute to an infrastructure fund that can be used by councils. In a recent White Paper, the Department of Equalization, Housing and Communities argued that a new approach was needed as the current system “allows some entrepreneurs to take disproportionate and unfair use of the land they develop”.
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