Deal between government and large house builders on fire safety costs ‘close’

Funding for these blocks needs to be worked out to progress an agreement. Mr Gove has previously asked the industry to provide £4bn in remediation funding, including for blocks they did not build. 

The current negotiations are believed to be exclusively with larger house builders, with the government then set to broaden out to smaller developers.

It is understood there are no plans to drop the legislative measures if a deal is reached.

How to fund the repair of the widespread fire safety issues which have emerged since the Grenfell Tower fire in June 2017 has become an increasingly difficult political question throughout the past five years.

While the government initially said ‘building owners’ should pay the bills – which can stretch to tens of millions per building depending on the severity of the issues found – the terms of most residential leases meant these costs were set to be passed on to the tenants of the flats.

This has left individual flatowners with bills topping £100,000 in the most extreme cases, on top of soaring costs of interim fire safety measures and insurance which they have had to meet since the fire. 

More than £5bn of public money has so far been committed to fund the work, but this has been limited to buildings that are taller than 18 metres and only covers the removal of combustible cladding, which is often just a proportion of the overall cost. 

Mr Gove has promised to legislate to protect residents from the cost of cladding works, with the costs of other works capped at £10,000 (or £15,000 in London) for most leaseholders. 

But securing the funding to cover the remainder of the bills remains a difficult issue, with the government seeking funding from industry to cover the bills.