Following publication of the final Grenfell Phase 2 Report which we commented on in our previous insights (Grenfell inquiry Phase 2 Report published and The Grenfell Phase 2 Report), there have been two recent developments relating to cladding and building safety:
- In November 2024, the National Audit Office (NAO) issued a report on dangerous cladding, examining the Ministry of Housing, Communities and Local Government (MHCLG's) remediation portfolio;
- The Public Accounts Committee has opened an inquiry into the remediation of dangerous cladding, which calls for written evidence to be submitted on topics including progress and timelines on identification and remediation, and the Government's approach to risk around building safety.
We examine some of the key points arising out of these developments below.
Is the pace of remediation too slow?
The NAO report examines whether "MHCLG's remediation portfolio in England is completing timely remediation of unsafe cladding at a reasonable cost to the taxpayer".
Its key findings include that:
- MHCLG estimates that there are 9,000-12,000 buildings over 11 metres that will need remediating;
- However, only 4,771 buildings have been identified and included in its portfolio, meaning that 60% of affected buildings are yet to be identified;
- MHCLG's estimate, based on its own modelling, is that remediation will be complete by 2035 on all buildings in England over 11 metres with unsafe cladding;
- However, the report observes that remediation is not currently on course to achieve this, and it is more likely that completion will be achieved in 2036-37;
The NAO report also makes a number of recommendations, including that:
- MHCLG should publish a "target date" by which it expects all affected buildings to be remediated – this would give residents in buildings not yet in a programme or being privately remediated greater transparency on timescales; and
- if progress with remediation has not picked up by the end of the year, MHCLG should consider mandatory registration for buildings between 11–18 metres (as it has for high-rise buildings over 18 metres).
This second recommendation would have important implications for developers and owners of residential buildings which are between 11-18 metres in height.
These do not currently fall within the definition of "higher-risk buildings" (HRBs) – which broadly captures buildings over 18 metres in height or with at least seven storeys, and with at least two residential units – which are subject to mandatory registration with the Building Safety Regulator (BSR) under the Building Safety Act 2022 (BSA). As we have explained previously (Registration of higher-risk buildings in England), the BSA makes it a criminal offence for a HRB that is not registered to be occupied.
While the NAO's recommendation appears to relate only to the occupation phase, it is worth recalling that the Grenfell Inquiry Phase 2 report has also recently called for a review of the definition of "higher-risk buildings".This criticised the "arbitrary" focus on the height of a building and considers that other critical factors such as the building's use and the presence of vulnerable individuals are "more relevant", and calls for the definition of HRBs to be "reviewed urgently".
For those with responsibility for HRBs during the occupation phase, clarity will be vital in light of the more stringent obligations imposed on Accountable Persons / Principal Accountable Persons: please get in touch if you would like further advice on the implications of this for your building.
Funding of remediation and introduction of Building Safety Levy
The NAO Report refers to MHCLG's "best estimate for total remediation costs" which is currently at £16.6 billion – of which £9.1 billion is to be funded through MHCLG programmes.
MHCLG intends however to cap taxpayer funding at £5.1 billion. One of the primary ways in which it intends to fund the difference is through the introduction of the new Building Safety Levy, which it anticipates will raise around £3.4 billion over 12 years.
As we previously reported in our insight - Second consultation on Building Safety Levy, the Government first announced its intention to introduce a Building Safety Levy as a tax on new residential developments in February 2021. There have since been two public consultations on the Levy. Some of the key proposals set out in the second (i.e. most recent) consultation included that:
- the Levy would apply to all new residential developments in England that require building control approval, irrespective of their height (whereas it had initially been envisaged to apply only to HRBs;
- the Levy would be collected by Local Authorities;
- there would be a grace period for any project that has already entered the building control process on the date the levy comes into operation.
The NAO Report notes that operational details of the Levy "remain undecided" and are under review by the new Government, but that the Levy is not expected to be introduced until Autumn 2025 at the earliest.
What next?
In its response to the NAO Report, the Government has committed to take action to speed up remediation, including promising to set out a "Remediation Acceleration Plan" in the near future. It has also commented that its commitment to accelerating remediation is backed by an investment of £5.1 billion but that it will "make those responsible pay for the rest".
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