Recommendations & Conclusions
5 items
35
Conclusion
17th Report - The Remediation of Danger…
Deferred
In December 2024, MHCLG published remediation cost information per square metre for high–rise buildings over 18 metres in the Building Safety Fund with a view to helping building owners understand the expected 56 Qq 31, 93, 93, 118; CA&G’s Report paras 13, 3.1, Appendix One 57 Ministry of Housing, Communities …
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In December 2024, MHCLG published remediation cost information per square metre for high–rise buildings over 18 metres in the Building Safety Fund with a view to helping building owners understand the expected 56 Qq 31, 93, 93, 118; CA&G’s Report paras 13, 3.1, Appendix One 57 Ministry of Housing, Communities & Local Government, Annex A: Technical guidance for applicants of building safety funding applying for funding via PAS 9980: 2022, updated 2 April 2024 58 RDC0099 Written evidence submitted by the National Fire Chiefs Council 59 Q 3; RDC0145 Written evidence submitted by End Our Cladding Scandal 22 range of costs for remediation and provide greater transparency to the public. MHCLG reported that the expected costs should range from £739 to £2,528 per m2. For most of the buildings in this dataset, remediation works had been agreed under the more risk-averse standard that pre–dated PAS 9980. Remediation costs had therefore, in most cases, included the removal and replacement of unsafe cladding. The proportionate approach to remediation that MHCLG adopted in 2022, and the PAS 9980 standard that supports it, favour lower cost mitigation measures such as sprinklers where risk to life is deemed tolerable. MHCLG therefore expected unit costs to change as more buildings are assessed under the newer standard.60
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Government response AI summary
The government agrees with the observation and commits to publishing the latest building number estimates by summer 2025. However, the exact timing for publishing estimates of costs and works completion dates is deferred, as it depends on the outcome of the forthcoming Spending Review.
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HM Treasury
38
Conclusion
17th Report - The Remediation of Danger…
Deferred
HM Treasury has agreed to provide short–term funding that would allow remediation to progress in advance of the Levy recouping funds in later years. Based on MHCLG’s financial planning, the NAO highlighted that total taxpayer exposure could reach a maximum of £6.3 billion in 2030-31 before all Levy receipts are …
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HM Treasury has agreed to provide short–term funding that would allow remediation to progress in advance of the Levy recouping funds in later years. Based on MHCLG’s financial planning, the NAO highlighted that total taxpayer exposure could reach a maximum of £6.3 billion in 2030-31 before all Levy receipts are collected.63 When we asked MHCLG what impact its acceleration plans might have on the spending cap, MHCLG assured us that taxpayer contributions towards remediation costs would remain capped at 60 C&AG’s Report, para 1.11; Ministry of Housing, Communities and Local Government, Cladding remediation unit costs: analysis of high-rise non-ACM buildings - GOV.UK, December 2024 61 RDC0006 Written evidence submitted by the Home Builders Federation; RDC0145 Written evidence submitted by End Our Cladding Scandal 62 Qq 88, 91, 93–96; C&AG’s Report, figure 10, para 3.11 63 C&AG’s Report, paras 16, 3.12 23 £5.1 billion. We therefore asked MHCLG whether accelerating remediation might increase taxpayer exposure, but officials did not provide an update on the figure. In a letter following the evidence session, MHCLG advised that its figures were estimates based on several factors including the total number of buildings requiring remediation, remediation costs, how fast buildings are fixed, and the quantum of levy receipts (which itself depends on new houses built). It assured us it continued to examine these and would be updating forecasts later in the year.64 Managing risk of fraud
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Government response AI summary
The government committed to publishing latest building number estimates by summer 2025, but the publication of estimates for costs and works completion dates is deferred until after the forthcoming Spending Review.
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HM Treasury
39
Recommendation
17th Report - The Remediation of Danger…
Deferred
The NAO report found that previous attempts by MHCLG to accelerate remediation resulted in it relaxing some of its safeguards and the taxpayer being exposed to an increased risk of fraud. This included moving from making payments in arrears to making up–front payments of between 30% and 80%.65 We asked …
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The NAO report found that previous attempts by MHCLG to accelerate remediation resulted in it relaxing some of its safeguards and the taxpayer being exposed to an increased risk of fraud. This included moving from making payments in arrears to making up–front payments of between 30% and 80%.65 We asked MHCLG whether it should have been obvious that relaxing funding criteria as dramatically as it did in 2020 would lead to increased fraud, noting that one potential loss of over £500,000 had already been identified. MHCLG told us that the priority for the early schemes had been to get funding out as quickly. It stressed that the system was never without checks at all, and that there were, for example, checks by experts around the scope of the work. It explained that it had made a series of changes over the last few years in response to a fraud risk assessment by the Government Internal Audit Agency, including benchmarking costs and a reduction in single–tender actions.66
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Government response AI summary
The government agrees and will provide an update on the feasibility of fraud measurement by the end of 2025. However, full outputs from the fraud loss measurement exercise, which has an 18-month standard, are not expected until Autumn 2026.
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HM Treasury
40
Conclusion
17th Report - The Remediation of Danger…
Deferred
The NAO report also highlighted how MHCLG was late to produce a full fraud risk assessment on the Building Safety Fund, only completing one in
Government response AI summary
The government committed to providing an update on the feasibility of fraud measurement by the end of 2025, but full outputs from the fraud loss measurement process will not be available until Autumn 2026.
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HM Treasury
41
Recommendation
17th Report - The Remediation of Danger…
Deferred
MHCLG told us how the design of Homes England’s Cladding Safety Scheme would help reduce fraud in future. It explained that the new scheme captures information centrally, rather than relying on one team to pull together more disparate sources of intelligence. The Cladding Safety Scheme has also restored the practice …
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MHCLG told us how the design of Homes England’s Cladding Safety Scheme would help reduce fraud in future. It explained that the new scheme captures information centrally, rather than relying on one team to pull together more disparate sources of intelligence. The Cladding Safety Scheme has also restored the practice of payment in arrears. MHCLG wrote to us after the hearing and provided further information on ways in which it is improving fraud prevention and detection on the Building Safety Fund, including increased counter fraud training and stronger fraud referral and investigation processes. MHCLG also told us it was working with the Public Sector Fraud Authority to keep its fraud risk assessments under review. MHCLG also confirmed that, in response to the NAO’s recommendation, it had started a feasibility study for a fraud measurement exercise.70 Managing impact of remediation on other housing priorities
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Government response AI summary
The government agrees and will provide an update on the feasibility of fraud measurement by the end of 2025. Full outputs from the fraud loss measurement exercise are anticipated by Autumn 2026.
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HM Treasury