1.It is unacceptable that, three years on, Grenfell-style cladding remains on hundreds of residential buildings. The Department has an objective to oversee the replacement of unsafe aluminium composite material (ACM) cladding, as used on Grenfell Tower, from all high-rise residential buildings to which it was affixed. While some progress has been made, there are still 300 high-rise buildings (around two-thirds of the total) which have not yet been fully remediated. This is lagging far behind the Department’s previous objective, for almost all high-rise blocks to have their Grenfell-style cladding replaced by June 2020; its new target date is the end of December 2021. The Department accepts that the building regulation system it oversees, which should ensure that high-rise buildings are safe to live in, has been ‘not fit for purpose’ for years. It is in the process of instituting large-scale reforms designed to improve building safety in future.
Recommendation: The Department should, within six months:
a) be working with the new Building Safety Regulator, begin vigorous enforcement action against any building owners whose remediation projects are not on track to complete by the end of 2021; and
b) begin publishing monthly updates of projected completion dates for all remaining high-rise buildings with ACM cladding, to increase transparency of progress without identifying individual buildings.
2.The Department is not fully funding the replacement of forms of dangerous cladding which are different from that used on Grenfell Tower, nor is it prioritising spending according to greatest risks or need. While the Department has established a new Building Safety Fund to finance the replacement of other forms of unsafe cladding, it has not provided a clear rationale for the size of this fund. The £1 billion fund will meet only around one-third of the estimated £3-£3.5 billion costs. The Department says it will distribute its funding on a ‘first come, first served’ basis, but could not say how it would sort applications in rank order, nor could it guarantee that funding would be prioritised according to financial need. Those buildings where the risks are greatest may well be excluded. In its previous fund to replace Grenfell-style cladding, the Department had insisted that stringent financial checks were needed to protect public money, but this seems incompatible with its intention to commit the much larger £1 billion Building Safety Fund in full by the end of the 2020–21 financial year.
Recommendation: The Department should, within three months:
a) publish its impact assessment of the safety risks and financial impacts on private leaseholders and social landlords (including knock-on impacts on house building and maintenance of existing stock) arising from only funding a fraction of the estimated costs of replacing non-ACM cladding from high-rise blocks; and
b) write to us, outlining its assessment of the risks to public money of committing all £1 billion of the Building Safety Fund by the end of March 2021, and how it will monitor and mitigate these risks.
3.The Department has no knowledge of how many care homes below 18 metres in height have dangerous cladding. The Department has published advice that the risks of unsafe cladding are increased for buildings, such as care homes, where there are residents who need significant assistance to evacuate. The Department is confident there are no high-rise care homes (above 18 metres in height) with dangerous cladding. However, while it estimates there are around 40,000 care homes, sheltered homes and hospitals below 18 metres in height—of which around 800 are between 11 and 18 metres—it has no data on whether any of these have unsafe cladding. While it plans to commission a data collection exercise to estimate the prevalence of unsafe cladding on residential buildings between 11 and 18 metres, it has not said it will prioritise care homes in this exercise. Nor has it announced any plans to find out what cladding is on the thousands of care homes below 11 metres.
Recommendation: The Department, working with the Care Quality Commission and local authorities, should make it a priority for its forthcoming data collection exercise to identify any care homes below 18 metres which have dangerous cladding. The Department should write to us by the end of 2020 setting out progress on this and on its wider data collection.
Residents of buildings with unsafe cladding face huge financial burdens, with little say in the process. Many say they are not being kept informed about the process of having their buildings made safe. In addition, residents who own their properties are incurring huge costs for safety measures, passed onto them by building owners. A major source of costs are interim fire safety measures, such as ‘waking watches’ (overnight patrols to evacuate residents in case of fire) which the Department has previously estimated at between £12,000 and £45,000 per week, per building. Leaseholders may also face significant costs for correcting wider fire safety issues revealed during the replacement of cladding. The Department acknowledges that leaseholders are incurring significant costs and experiencing impacts on their mental health, but is clear that its funding schemes, totalling £1.6 billion, are solely for replacing dangerous cladding. It believes that as cladding is replaced this will itself remove the need and costs of interim measures.
Recommendation: The Department should write to us within three months, setting out what specific steps it will take to provide greater transparency for residents throughout the application and remediation process, and how it will ensure that building owners meet a standard of service in communication with residents.
4.The Department has not done enough to address spiralling insurance costs and ‘nil’ mortgage valuations. Private leaseholders in blocks with dangerous cladding have received ‘nil’ valuations for their properties, meaning they have found it impossible to sell or remortgage, while their insurance premiums have risen over 400% in some cases. The Department’s introduction of an External Wall Fire Review process in December 2019 was designed to provide assurances to lenders and buyers where the external walls of apartment blocks had been inspected for safety. However, qualified professionals have had difficulty accessing the personal indemnity insurance needed to undertake these reviews, which has reduced the availability of these inspections. In addition, following changes to departmental guidance to assess and manage the risk of external fire spread to buildings of any height, there is uncertainty whether the External Wall Fire Review process should also now apply to lower-storey buildings. The Department tells us that this is an ‘industry issue’, with efforts to address the problems with the review process being industry-led, but in our view the Department needs to step up and ensure matters are resolved quickly.
Recommendation: The Department should ensure that cross-sector work to resolve issues with the External Wall Fire Review process progress at pace. As part of this cross-sector work, the Department must ensure that professionals can acquire indemnity insurance, and leaseholders are not facing escalating insurance premiums. The Department should write to us within three months setting out its assurance that these processes are operating effectively.
5.There is a shortage of specialist skills to support the remediation of buildings with unsafe cladding. There is a shortage of fire safety expertise, both in the enforcement and inspection of buildings with unsafe cladding; this has been a particular issue with fire engineers. To date, work has centred on the removal and replacement of Grenfell-style cladding, covering around 450 buildings. However, the demand for specialist skills is set to increase markedly with the new £1 billion Building Safety Fund, launched in May 2020, for removing other forms of unsafe cladding. The Department has estimated there are around 1,700 buildings within the scope of the new fund. The Department says that it has begun to look at supply chain issues through its project management contractor, but this is very late in the day, given that it has committed to allocating funding by April 2021.
Recommendation: The Department should, within the next three months, assess the capacity of specialist fire safety skills within the sector and set out what the impact is on delivery of its timetables for the removal and replacement of unsafe cladding. It should include in this assessment options to tackle the skills shortage so that this does not become a barrier to remediation work continuing at pace.
Published: 16 September 2020