Only 1,392 buildings with aluminium composite material (ACM) cladding have been remediated as of August and two-thirds of the estimated total are yet to be identified, a report has found.
A report from the National Audit Office (NAO) showed this was equivalent to around 12% and 16% of the government’s high and low estimates of how many properties would need construction to remove the unsafe cladding.
The aim of the report was to assess whether remediation has been timely and at a reasonable cost to the taxpayer.
Slow progress with cladding remediation
As of August, 4,771 buildings taller than 11 metres were within the Ministry of Housing, Communities and Local Government (MHCLG) portfolio for remediation, consisting of around 258,000 homes.
The NAO said remediation works had begun on an additional 985 buildings but had not started on 2,394 properties.
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The report stated progress was slower than projected and works had started on 355 fewer medium- and high-rise buildings than planned.
The remediation of buildings over 11 metres tall is not on course to complete by 2035, the NAO said, as there were “significant challenges to overcome”.
“To meet the expectation, based on its latest modelling, that remediation works on all buildings over 11 metres with unsafe cladding will be completed by 2035, MHCLG must ensure lost ground is regained and completion rates increased in future years,” it said.
The report said because the MHCLG did not publish delivery milestones, it was hard for the public and Parliament to see whether this was reasonable and left people unsure of when their building would be made safe.
Where works are planned or underway, the NAO said residents were informed of plans, but it was not always satisfactory for them to rely on communications from building owners as they or their agents were often the cause of delay.
Two-thirds of buildings yet to be recorded
The report said it was taking longer than expected for affected buildings to be identified and brought into the MHCLG’s portfolio due to incomplete building records, construction materials that differed from those on plans and the difficulty around tracing building owners.
It noted that there was no mandatory registration for medium-rise buildings, while some building owners may be reluctant to engage in case problems were discovered, and others may not have the time or knowledge to understand the process.
The NAO said: “MHCLG is developing a strategy for understanding what buildings are not yet in the portfolio, and programme-level escalation strategies to incentivise, encourage and compel different categories of freeholder, social housing provider and developer to engage.
“However, there is a risk that some may never be identified.”
The report said the government had “significantly changed” the types of buildings within the scope of its funding programmes for remediation as the scale of the problem became more apparent.
The NAO said the changes attempted to identify who would pay for works, “but introduced more uncertainty over the number of buildings in scope for government programmes and how much remediation will cost”.
Programmes have been established to address the 9,000-12,000 estimated buildings taller than 11 metres that may need remediation, but not buildings below this height.
With 4,771 within the department’s portfolio, this means around 60% of buildings over 11 metres tall are yet to be identified.
It also suggested the scale of the problem was uncertain when it came to lower-rise buildings, adding: “While MHCLG’s programmes currently focus on buildings taller than 11 metres, it does not know how prevalent dangerous cladding is in low-rise buildings but there is no government funding for the remediation of buildings below 11 metres.”
Effect on residents and homeowners
The NAO said the impact of cladding had gone beyond the victims of the Grenfell fire, as many people suffered “significant financial and emotional distress”.
The organisation named varying waking watches, which it estimated to cost £137 per home, higher insurance premiums passed on through service charges, and a lack of access to mortgage finance leaving people unable to move home.
It added: “MHCLG reported in July 2024 that the gap in the proportion of mortgage applications accepted on buildings with and without unsafe cladding had narrowed between December 2023 and April 2024.
“MHCLG does not hold data on how the affordability of these mortgages compared.”
The cost of works
The NAO said the MHCLG has chosen remediation methods that prioritised speed but could increase the risk of fraud and poor value for money.
It said the department amended protections originally on its ACM fund, which included higher scrutiny of applicants and delivered payment in arrears of costs. This was changed to introduce advance payments to applicants, which the report said “exposed the taxpayer to an increased risk of poor value for money and potential losses through fraud, with advance funding in particular increasing the opportunity for recipients to misuse funds”.
The department has since improved its counter-fraud measures.
In 2022, the MHCLG said it wanted to cap the cost to taxpayers at £5.1bn, but the NAO said there was still uncertainty over how much would be generated by the Building Safety Levy, which developers are expected to contribute to from next year. Payment mechanisms are yet to be confirmed.
NAO warned that this approach opened the possibility for “lengthy disputes” between developers and freeholders over the scope of work required, and such disagreements were causing delays.
Total remediation costs are estimated to be £16.6bn and MHCLG is expected to contribute £9.1bn. However, this is a best estimate from a range of £12.6bn to £22.4bn.
As of August, the MHCLG has spent £2.3bn on fixing buildings.
