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Mon June 14 2021

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National Audit Office report exposes cladding remediation programme failings

19 Jun 20 Tower blocks housing students are having their dangerous cladding removed at a much faster rate than towers of owner-occupiers or private tenants.

Where flammable cladding needs replacing on tower blocks, students are getting preferential treatment, it seems.

By April 2020, two thirds of purpose built student accommodation blocks that needed their cladding replaced had been fixed. By comparison, in the private residential sector, which includes owner-occupiers and well as private tenants, only one in seven has been put right.

These numbers are in a report by the National Audit Office (NAO) report, published today, Investigation into remediating dangerous cladding on high-rise buildings.

Another key finding is that the government’s timetable for replacing towers clad in dangerous systems other than aluminium composite material (non-ACM) looks totally unrealistic.

Three years on from the Grenfell Tower fire, which exposed fault lines in UK building regulations and the lethal dangers of certain popular cladding systems, progress is being made in removing dangerous cladding from high-rise residential buildings, the government spending watchdog says. But the picture is very mixed.

In the private residential sector, in particular, the pace of work has been slower than the government had expected.

In the wake of the Grenfell Tower fire, the Ministry of Housing, Communities & Local Government (MHCLG) established the Building Safety Programme. One of the main objectives is to ‘oversee and support the remediation of high-rise residential buildings that have unsafe aluminium composite material (ACM) cladding’.

In May 2018 the ministry announced £400m to fund remediation in the social housing sector in England. In May 2019 it announced a further £200m for the remediation of equivalent buildings in the private housing sector.

By April 2020, 149 of the total 456 buildings which are 18 metres and above and have unsafe ACM cladding systems had been fully remediated, leaving 307 where remediation was not yet finished, of which work had not yet begun on 167.

The pace of remediation has been fastest in the student accommodation and social housing sectors, but slowest in the private residential sector. By April 2020, 66.7% of student accommodation blocks and 46.8% of social housing buildings had been fully remediated, compared to 13.5% of private sector residential buildings.

Student accommodation developments tend to have a single, easily identifiable owner. For private residential tower blocks, by contrast, it is usually difficult to identify who is legally responsible. By the end of April 2020, the MHCLG had paid out just £1.42m (0.7%) from the £200m private sector fund and £133m (33.3%) from its £400m social sector fund.

The ministry estimates that all buildings within scope of its funding will be remediated by mid-2022, with over 95% completed by the end of 2021. This is later than the expectation set in July 2019 by the then secretary of state, that “other than in exceptional circumstances, building owners should complete remediation […] by June 2020.”

The NAO says that this does not take account of the impacts of Covid-19: 60% of cladding remediation projects that were under way paused in April 2020., although most have now restarted after ministerial intervention.

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Not all buildings with dangerous ACM cladding fall within scope of the government’s existing funding schemes for the social and private housing sectors. This includes high-rise hotels, student accommodation, and build-to-let blocks, as well as buildings below 18 metres. MHCLG is aware of seven build-to-let properties over 18 metres with unsafe ACM cladding which are not eligible for funding, because the private sector funding scheme is designed to avoid the costs of remediation being passed on to leaseholders. In the case of build-to-let properties, it believes that building owners have a legal and financial obligation to pay for remediation themselves.

To access the funding schemes, building owners must demonstrate they have made a reasonable attempt to meet or recover costs without having to charge leaseholders – for example, by paying from their own resources, or through insurance, warranty claims or legal proceedings. MHCLG says it could take building owners several years to recover costs in legal proceedings in many cases. By February 2020, it  had recouped £800,000 from the private sector, and a further £6.4m from the social sector where building owners had successfully reclaimed costs from original contractors.

The government expects to pay for 94 projects (out of 208) in the private sector, where the developer or building owner has not agreed to fund remediation themselves. The owners of 84 private sector residential buildings have committed to fund remediation, with a further 23 self-funded through warranty claims. Seven buildings have not agreed a funding route. In the social sector, MHCLG has committed to fund 139 (out of 154) residential buildings.

A further £1bn funding was announced in March 2020 for the remediation of unsafe non-ACM cladding on high-rise buildings in the social and private residential sectors. It has not yet been established how many buildings over 18 metres have unsafe non-ACM cladding, but the working estimate is around 1,700.

The government intends to commit the latest £1bn in full by the end of March 2021, but the NAO says administration of this new scheme “may present significant challenges given how demanding it has been to manage the existing ACM funding schemes, which are just over half the size of the new fund”.

Gareth Davies, the head of the NAO, said: “MHCLG has made progress in overseeing the removal of dangerous cladding from many buildings, particularly in the social housing sector. However, the pace of progress has lagged behind its own expectations, particularly in the private residential sector. It has a long way to go to make all high-rise buildings safe for residents.

“Going forward, it is important that the department successfully manages the administrative challenges of funding building owners to carry out remediation work, particularly given its intention to commit a further £1bn in full by the end of March 2021.”

Meg Hillier MP, Chair of the House of Commons public accounts committee, said: “Three years on from the Grenfell Tower disaster, two thirds of high rise buildings with the same sort of cladding haven’t replaced it. This work should have finished already. 

“The deadlines for removing other (non-ACM) dangerous cladding are unrealistic, and there may not be enough people with the right skills to do everything that needs to be done.  

“Developers should be footing the bill for this work, not taxpayers.”

The MHCLG also issued a statement in response to the NAO report: “We are clear that building owners must keep their residents safe and we are providing them with unprecedented support to do so. The government has provided £1.6bn to ensure unsafe ACM and non-ACM cladding is removed swiftly from high-rise buildings, and is bringing forward the biggest change in building safety in a generation.

“We have made progress with the removal and replacement of ACM cladding, but it is clear there is much more still to be done and building owners have a legal responsibility to ensure their building is safe.”

The National Audit Office report Investigation into remediating dangerous cladding on high-rise buildings is available at www.nao.org.uk

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