Government “should publish target date for end of cladding remediation”

The UK’s independent spending watchdog’s recommendations feature in its first report on the Government’s remediation portfolio since five different programmes were brought together into a single portfolio in 2023 (more of which anon).

The NAO’s report follows the publication of the Grenfell Tower Inquiry Panel’s Phase 2 final report in early September, which examined the root causes of the tragic fire that occurred on 14 June 2017 and resulted in 72 deaths.

In its extensive deliberations, the NAO examines how well it believes the Ministry of Housing, Communities and Local Government is maximising the identification of unsafe buildings, driving progress on necessary remediation works and managing taxpayers’ exposure to the related costs.

The Government has significantly changed the types of buildings within scope for its programmes – not to mention its approach to remediation – as the scale and impact of the cladding problem has become clearer. Programmes are now in place to address dangerous cladding for all of the estimated 9,000-12,000 buildings over 11 metres tall above ground that the Government considers to be in need of remediation.

There has been a substantial increase in remediation activity since the NAO’s 2020 investigation into the remediation of dangerous cladding on high-rise buildings. To date, 4,771 buildings have been brought into the portfolio, but it’s taking somewhat longer than expected to identify the remainder, while some may never be identified.

With a potential 7,200 buildings or more (up to 60%) still to be identified, many individuals resident in tower blocks still don’t know when their buildings will be made safe, which is contributing to those same residents suffering significant financial and emotional distress.

While building owners are responsible for fixing their buildings, engagement with the Government’s grant programmes is voluntary. As the NAO previously reported, incomplete building records, construction materials that differ from those listed on building plans and the difficulties involved in tracing owners can make identifying any affected buildings somewhat difficult.

Mandatory registration

It's now just over seven years since the Grenfell tragedy occurred and 98% of estimated high-rise buildings (ie those over 18 metres tall) with dangerous cladding are in the portfolio. Mandatory registration of high-rise buildings under the Building Safety Act 2022 is helping to identify any that do remain.

There’s no mandatory registration for (the more numerous) medium-rise buildings (ie those spanning anywhere from 11 to 18 metres tall), while the Ministry of Housing, Communities and Local Government understands that some building owners may be reluctant to engage for fear of uncovering problems not within scope for central Government funding, while others can lack the time and knowledge to navigate the process.

Of the 4,771 medium-rise buildings in the Government’s portfolio – which is the equivalent of 258,000 homes – remediation work has yet to begin on over half of them and is in progress for one-fifth. In around one-third of cases, necessary remediation work has finished. Of all the 9,000-12,000 buildings potentially in scope, work is complete for between 12% and 16% of them.

The NAO’s latest report finds that, in total, it will cost an estimated £16.6 billion to fix unsafe cladding on all buildings over 11 metres in England. The Ministry of Housing, Communities and Local Government expects to provide £9.1 billion of that sum, with the remainder funded by developers who’ve agreed to remediate buildings they developed, private owners or dedicated social housing providers.

To keep taxpayer contributions within a £5.1 billion cap over the long-term, the Ministry of Housing, Communities and Local Government plans to recoup £700 million through refunds from developers for remediation works the taxpayer has already funded, and around £3.4 billion from a new Building Safety Levy. The latter will be paid by developers on new developments, although the Government is yet to confirm payment mechanisms. It doesn’t expect to introduce the Building Safety Levy until late next year at the earliest.

In 2023-2024, there were potential losses of over £500,000 (paid to one applicant) through fraud, which has led to the Ministry of Housing, Communities and Local Government reviewing its counter-fraud structures and developing plans to improve fraud management of the Building Safety Fund.

Wider priorities

The Ministry of Housing, Communities and Local Government acknowledges the fact that there may be overlaps between its own remediation programmes and wider central Government priorities, from decarbonisation through to building new homes. The NAO’s report finds that the Ministry “needs to do more” in order to ensure that policies are not working at cross-purposes.

As the Ministry of Housing, Communities and Local Government and other bodies continue to investigate buildings at risk, they’re also gathering data about buildings on a national scale, which may well support future Government priorities (among them the nation’s ‘Net Zero’ ambitions).

“Seven years on from the Grenfell Tower fire, it’s fair to state that there has been progress, but considerable uncertainty remains regarding the number of buildings needing remediation, the costs and timelines involved and also how public spending will be recouped,” urged Gareth Davies, head of the NAO. “There’s a long way to go before all affected buildings are made safe alongside risks that the Ministry of Housing, Communities and Local Government simply must address if its outlined approach is to succeed.”

Davies continued: “Placing the onus on developers to pay and introducing a more proportionate approach to remediation should help in protecting taxpayers’ money, but this way of working has also created grounds for dispute and induced delays.”

In conclusion, Davies noted: “In order to stick to its £5.1 billion cap in the long run, the Ministry of Housing, Communities and Local Government needs to ensure that it can recoup funds through successful implementation of the proposed Building Safety Levy.”

Budget announcement

The NAO is fully aware of the recent Budget announcement in which the Government has committed to improving building safety and accelerating the remediation of unsafe housing in response to the Grenfell Tower fire. There’s going to be investment in remediation rising to over £1 billion in 2025-2026, which includes new investment to speed up the remediation of social housing.

On that note, Nicola John (managing director at Fire Door Maintenance, which is part of UAP Ltd) asserted: “The Government’s plans to invest in cladding removal are too little, too late. Instead of addressing the root causes of poor fire safety standards, this move only focuses on the symptoms.”

John continued: “In order to truly overcome the causes of catastrophes like that which developed at Grenfell Tower, we need to train the industry to understand the entire lifecycle of fire safety products such that there are no knowledge gaps. It’s only with such a system in place that the industry can move forward. What’s more, we need regulatory oversight in place from the top down.”

Remediation programmes

Last year, and as stated, the Ministry of Housing, Communities and Local Government brought its five remediation programmes together into a single remediation portfolio. That portfolio comprises:

*the Aluminium Composite Material (ACM) programme with grant funding to support the remediation of buildings over 18 metres tall and playing host to ACM cladding (that funding included £400 million for the social housing sector in 2018 and £200 million for the private sector in 2019)

*the Building Safety Fund (which is now closed for new applications outside of London) encompassing grant funding to support the remediation of high-rise buildings with non-ACM flammable cladding (there was funding of £1 billion in March 2020 for Tranche 1 and £3.5 billion in February 2021 for Tranche 2)

*the Cladding Safety Scheme launched in July last year and featuring grant funding to support the remediation of buildings over 11 metres tall outside of London and those of 11-18 metres tall in London

*the Developer Remediation Programme (including the Developer Remediation Contract, which central Government first asked developers to sign in January 2023, and the Responsible Actors Scheme established last July) to oversee self-remediation activity by developers

*the Social Housing Programme, itself established in mid-2023 to monitor self-remediation in the dedicated social housing sector