Cladding remediation programmes, transparency and target date

Gov dangerous cladding report cover 1000.jpg

Download Report - Investigation into remediating dangerous cladding on high-rise buildings (.pdf — 3 MB)

Download Summary - Investigation into remediating dangerous cladding on high-rise buildings (.pdf — 150 KB)

1 The government should publish a target date for ending cladding remediation
2 Five programmes one portfolio
3 Changing programmes and expanding portfolio
4 Non-mandatory medium-rise approach
5 Estimations of costs
6 Comment and assessment
7 Further notes
8 Related articles on Designing Buildings

[edit] The government should publish a target date for ending cladding remediation

Publishing a target date for the completion of dangerous cladding remediation works and providing greater transparency on remediation performance are two key recommendations arising from a new National Audit Office (NAO) report.

Up to 60% of buildings with dangerous cladding have not yet been identified, and remediation for buildings within government’s portfolio is slow.
Ministry of Housing, Communities & Local Government (MHCLG) modelling indicates an end date of 2035 for completing cladding remediation, but without published milestones, hundreds of thousands of residents have no idea when their building will be made safe.
While most leaseholders are now protected from remediation costs, residents continue to suffer significant emotional and financial distress.
With total estimated costs of £16.6bn and the Building Safety Levy yet to start, there are risks to keeping taxpayer contributions capped at £5.1bn.

[edit] Five programmes one portfolio

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:

The ACM programme (MHCLG said this may soon close to new applications) – grant funding to support remediation of buildings over 18m with ACM cladding. The programme is made up from the Private Sector ACM Cladding Remediation Fund (PSCRF) and the Social Sector ACM Cladding Remediation Fund (SSCRF). Funding included £400 million for social housing sector (2018) and £200 million for the private sector (2019).
The Building Safety Fund (BSF) (now closed for new applications outside London) – grant funding to support remediation of high-rise buildings with non-ACM flammable cladding. Funding of £1 billion in March 2020 for tranche 1 and £3.5 billion in February 2021 for tranche 2
The Cladding Safety Scheme (CSS) (launched July 2023) – grant funding to support remediation of buildings over 11m outside London and 11–18 metres inside London. Designed and managed by Homes England, who were appointed MHCLG, have streamlined and automated the scheme to make it faster and cheaper to run.
The Developer Remediation Programme (including the Developer Remediation Contract which government first asked developers to sign in January 2023 and the Responsible Actors Scheme established in July 2023) to oversee self-remediation activity by developers.
The Social Housing Programme (from summer 2023) to monitor self-remediation in the social housing sector.

The National Audit Office's (NAO’s) report follows the publication of the Grenfell Inquiry in September, which examined the root causes of the fire in June 2017 that resulted in the deaths of 72 people. In the report the NAO examines how well MHCLG is maximising the identification of unsafe buildings, driving progress with remediation works and managing taxpayers’ exposure to related costs.

[edit] Changing programmes and expanding portfolio

The government has significantly changed the types of buildings within scope for its programmes, and its approach to remediation, as the scale and impact of the cladding problem has become clearer. It now has programmes to address dangerous cladding for all the estimated 9,000 to 12,000 buildings over 11 metres it considers need remediating.

There has been a substantial increase in remediation activity since the NAO’s 2020 Investigation into remediating dangerous cladding on high-rise buildings. So far, 4,771 buildings have been brought into the portfolio, but it is taking longer than expected to identify the remainder, and some may never be identified. With a potential 7,200 buildings or more (up to 60%) still to be identified, many people still do not know when their buildings will be made safe, contributing to resident’s suffering significant financial and emotional distress.

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

Seven years after Grenfell, 98% of estimated high-rise buildings (over 18 metres) 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 remain.

[edit] Non-mandatory medium-rise approach

There is no mandatory registration for (more numerous) medium-rise buildings (11 to 18 metres), and the Department understands some building owners may be reluctant to engage for fear of uncovering problems out-of-scope for government funding, and others can lack the time and knowledge to navigate the process.

Of the 4,771 medium-rise buildings in the government’s portfolio – the equivalent of 258,000 homes – remediation work has yet to start on over half, is in progress for a fifth, with around one third complete. Of all 9,000-12,000 potentially in scope, work is complete for only 12-16%.

[edit] Estimations of costs

The report found, in total, it will cost an estimated £16.6 billion to fix unsafe cladding on all buildings over 11 metres in England. MHCLG expects to provide £9.1 billion of this, with the remainder funded by developers who have agreed to remediate buildings they developed, private owners or social housing providers.

To keep taxpayer contributions within a £5.1 billion cap over the long-term, MHCLG 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 Levy will be paid by developers on new developments, though MHCLG is yet to confirm payment mechanisms. It does not expect to introduce the levy until autumn 2025 at the earliest.

In 2023-24 there were potential losses of over £500,000 (paid to one applicant) through fraud, which has led to the Department reviewing its counter-fraud structures and developing plans to improve fraud management of the Building Safety Fund.

MHCLG acknowledges there may be overlaps between its remediation programmes and wider government priorities, from decarbonisation to building new homes, and the NAO report found MHCLG needs to do more to ensure that policies are not working at cross-purposes.

As MHCLG and other bodies investigate buildings at risk, they are gathering data about buildings on a national scale, which may support future government priorities, such as net zero ambitions.

[edit] Comment and assessment

Gareth Davies, head of the NAO said:

“Seven years on from the Grenfell Tower fire, there has been progress, but considerable uncertainty remains regarding the number of buildings needing remediation, costs, timelines and recouping public spending. There is a long way to go before all affected buildings are made safe, and risks MHCLG must address if its approach is to succeed.

“Putting the onus on developers to pay and introducing a more proportionate approach to remediation should help to protect taxpayers’ money. Yet it has also created grounds for dispute, causing delays. To stick to its £5.1 billion cap in the long run, MHCLG needs to ensure that it can recoup funds through successful implementation of the proposed Building Safety Levy.”

[edit] Further notes

This report uses data up to August 2024. NAO are aware of the Budget announcement, where government has committed to improving building safety and accelerating remediation of unsafe housing in response to the Grenfell Tower fire. Including investment in remediation rising to over £1 billion in 2025-26, which includes new investment to speed up remediation of social housing.

Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on the NAO website.

This article was issued via an NAO Press Release as 'Dangerous cladding: the government’s remediation portfolio' dated 4 November, 2024.