Recommendation 8

The Department told us it estimated the costs of replacing this cladding as between £3 billion and £3.5 billion; the new £1 billion fund would therefore be expected to cover up to a third of these costs. It said the fund was not designed to fund the replacement of all unsafe non-ACM cladding from high-rises, but would focus on those cases where affordability to leaseholders was the greatest barrier to cladding replacement.24 The Department said it was operating with an expectation that those private building owners which could afford to pay for cladding replacement themselves would do so; however it was unable at this stage to say what proportion that might be.25 It further expected that all those social landlords (housing associations and local authorities) which could afford to, would also pay for these works themselves—though it was unable to suggest how many were already taking this work on without funding, nor what the impacts would be on their finances if they absorbed these costs themselves.26 Despite these uncertainties the Department was confident that the fund would be sufficient to pay for all the buildings in the private sector, where building owners would not pay for the works themselves.27 At the same time, it said it would operate a ‘first come, first served’ approach to distributing the fund, which we took to suggest that funding might in fact run out before all claims were met. The Department was unable to provide details on what ‘first come, first served’ would mean in practice, including how it would date applications to ensure they were paid in the order they came in; nor could it assure us that those buildings with the greatest risks would be prioritised.28