Cladding remediation unit costs: analysis of high-rise non-ACM buildings
Published 17 December 2024
Applies to England
© Crown copyright 2024
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Introduction and headlines
A key focus from the outset of the Remediation Portfolio has been the prioritisation of pace, which has ensured the highest priority buildings with unsafe cladding have been remediated quickly. Alongside this priority, project costs have been reviewed with reference to an initial benchmark and the input of cost consultants. We have reached the point where sufficient projects have moved through the remediation grant funding process and a highly representative and comprehensive data set is now available; one which can be analysed to refine the earlier benchmark and provide insights for building owner applicants and their cost consultants.
This release publishes for the first time data on unit costs, defined as cost per m2 of cladding remediated, for high-rise (18m+) non-ACM buildings. It provides information on the mean unit cost, analysis against area remediated (m2), and an elemental unit cost breakdown into key cost categories, from which an understanding of significant cost drivers can be achieved.
The purpose of this release is therefore to:
- inform building applicants and their cost consultants as to the expected range of market price levels they could expect when remediating their building
- in doing so, strengthen their hand in achieving value for money through negotiation with the remediation supply chain
- support new entrants to the remediation supply chain by increasing their understanding of remediation costs and cost drivers
- inform the public on the unit costs of remediation
The high-rise focused cost data in this release can therefore be used by applicants and their cost consultants to better predict the cost of remediating their building, while also giving additional data to contractors to refine and evidence their cost estimates.
In presenting this data it is important to highlight that unit costs across construction portfolios tend to naturally vary due to factors such as building location, building access, cladding type, area of remediation and the scope of works. Unit costs will therefore also vary over time given the average profile of buildings (for example, the m2 of cladding needing to be remediated) which are added to the dataset may well be different to the average profile of the earliest projects. Nonetheless, the release of unit cost data can still provide a valuable guide concerning whether an individual project should tend towards the mean or be recognised legitimately as an outlier. This data will therefore be used by MHCLG to benchmark the costs put forward by applicants for grant approval, and it is expected that in most cases costs will be in line with the dataset. Outliers will attract additional scrutiny, interrogation and challenge before any approval can be given.
This data does not remove the obligation that applicants have, to ensure value for money. Competitive tendering remains the expectation, and this data is designed to help the applicant during that process.
For this data release the cost data is from projects that have had funding approved between 2020 and June 2024, and the mean cost of remediation (when excluding outliers) is £1,634 per m2 cladding remediated (Q2 2024 prices). Based on our analysis the expected cost range is between £739 and £2,528 per m2, which highlights that costs falling outside of this central band should be recognised as potential cost outliers.
Whilst building location and other factors do have an impact, the strongest determinant of unit cost is the area of cladding that is being remediated. Buildings with smaller areas of remediation have a higher unit cost than projects with larger areas of remediation. Unit costs range from a mean of £2,386 per m2 cladding remediated for those buildings with less than 500m2 cladding remediated, down to £1,194 for those buildings with more than 5000m2 of cladding remediated. This is typically due to economies of scale, where remediating larger cladding areas is more cost efficient than smaller cladding areas.
The largest single elemental cost is the removal and replacement of cladding (44% of the total cost), with an expected cost range of £393 to £1,147 per C. The range is due to variance in the scope of works, which can range from remediating part of the cladding to replacing the complete facade and structural fixings. An increase in the scope of works will also have a knock-on effect of increasing the amount of professional fees, contractors’ preliminaries (site establishment and running costs) and overheads and profits (OH&P).
Furthermore, the specialist nature of projects which only remediate cladding will attract a proportionally higher percentage of associated preliminaries and professional fees than a traditional construction project, where multiple trades are progressed consecutively. An additional premium will also be attributed to the cost per m2 because of the necessity to remediate cladding with residents continuing to occupy the building during construction, together with other specific costs that would not be part of the traditional construction process - such as invasive surveys, alternative resident parking and access, and legal fees for dealing with commercial leaseholders / tenants. The cost data presented is therefore particular to cladding remediation projects and not readily comparable to data from other sectors whether within the public or private sector.
It should also be noted that this dataset predominantly relates to projects that have undergone the CAN (Consolidated Advice Note) assessment. As more buildings move to the FRAEW (Fire Risk Assessment of External Walls) approach based on PAS 9980, the unit cost of cladding remediation is expected to change.
Given this is the first publication of remediation unit cost data, we have applied tried and tested approaches to releasing unit cost data, which were first introduced by the Government Construction Strategy in 2011 and continue to be promoted by the Construction Playbook. Nonetheless, we will use this opportunity to follow up with building owner applicants, industry cost consultants and suppliers to confirm the usefulness of the data released and to identify any additional aspects which could be of value and included in future publications.
Background
As a result of government action, all residential buildings above 11 metres in England now have a pathway to fix unsafe cladding, through either a taxpayer-funded scheme or developer-funded scheme. Where developers or building owners are not currently funding cladding remediation, the government has committed £5.1 billion to ensure that people are safe and feel safe in their homes.
Four remediation schemes are underway:
- the Private Sector and Social Sector ACM Cladding Remediation Funds: which have been open since 2018 and cover buildings with the most dangerous type of cladding like that on Grenfell
- the Building Safety Fund: first opened in 2020 for buildings over 18 metres with other forms of unsafe cladding
- the Cladding Safety Scheme: which was fully opened in July 2023 for buildings between 11 and 18 metres and is also open to new applications for 18m+ buildings outside of London
- developers have now assumed direct responsibility for remediating all life-critical fire safety defects in more than 1,000 buildings
From the outset, 18m+ buildings in the BSF or ACM Funds were reviewed against a benchmarking model, which was based on the limited data set available at time. This has been applied by Delivery Partners (Homes England and the Greater London Authority) and their cost consultants, together with other comparators, to help ensure value for money was achieved. We have reached the point where sufficient projects have moved through the remediation grant funding process and a highly representative and comprehensive data set is now available, which can be analysed to refine the earlier benchmark. This release therefore also provides insights for building owner applicants and their cost consultants, who benefit from a programme-wide view and a better understanding of outlying projects and cost drivers. This also enhances our ability to assess the value for money represented by each individual project.
The cost data has been collected for projects over a period from 2020 to June 2024 and has been adjusted by inflation indices to be in line with price levels in June 2024. It should be noted that during this period the remediation market has been maturing, and there has also been a changing market context, which should be considered when trying to make direct cost comparisons between projects constructed at different times, for example those submitted during 2020 compared to 2024. The efficiency of remediation delivery will have been subject to market effects caused by external factors such as the Covid-19 pandemic, the war in Ukraine, fluctuations in the availability of materials, and price of professional indemnity insurance. Government has sought to help minimise the impact of these factors, while also supporting the introduction of PAS 9980 to ensure the fire risk assessment of external wall systems is both proportionate and consistent in terms of remediation outcomes.
To note
There are several important points to note prior to reviewing, analysing, or using the data in this data release:
1. All project cost figures are from the funding awarded to individual projects as part of the Building Safety Fund. The data in this data release is therefore for high-rise (18m+) non-ACM buildings only.
2. All unit cost figures shown in this release exclude:
a) VAT, as this is considered a percentage uplift on various cost items, and not all items are eligible for VAT
b) Contractor contingencies and any variations to the original cost of works, as projects are still ongoing and therefore variations and contractor contingencies could still be raised and realised
3. 300 projects have been analysed for this data release, where costs were approved by MHCLG between November 2020 and June 2024. The Building Cost Information Service (BCIS) Tender Price Index (TPI) has been used to estimate price inflation for this period, and all costs have been adjusted accordingly to be in line with price levels at June 2024.
4. Results have been separated out by cladding remediation area groups (for example, 500m2 to 1000m2) so that changes in cost behaviour related to remediation area can be observed.
5. Outlying projects have been removed from the analysis (except where stated). Outliers were identified using the 1.5x interquartile range method (costs above the 75th percentile plus 1.5x the interquartile range, or costs below the 25th percentile less 1.5x the interquartile range). Outliers were identified for each area grouping separately.
6. Outliers are due to various factors (for example, difficult access or complex cladding makeup) and have been removed to give a more representative analysis.
7. This release documents the range of expected costs. The range is defined as the mean cost plus or minus 1 Standard Deviation (all values calculated with outliers excluded).
8. Professional fees include eligible costs such as Design, Project Management, Cost Consultancy and Legal fees.
9. Preventative fire mitigation measures implemented by the remediation portfolio, such as Waking Watch Fire alarm installation and upgrades, front door upgrades etc., are excluded from the cost data.
10. This data is a significant sample size and covers a representative period such that insights and trends can be considered reliable. It has been quality assured and analysed in accordance with recognised industry-standard practice.
11. The majority of projects analysed as part of this dataset used the CAN assessment approach, and we expect project costs will vary more significantly when more buildings that have been scoped under FRAEW (Fire Risk Assessment of External Walls) enter the process.
12. This publication relates to MHCLG funded work in England.
Unit cost overview
Through analysis of 300 high-rise applications, the mean cost and expected range of cost per m2 of remediation has been calculated (excluding VAT, contractor contingencies and variations). The results are shown Table 1.
Table 1: Mean cost per m2 cladding remediated excluding VAT, Contractor Contingencies and Variations. This includes the expected cost range (mean cost plus/minus 1 Standard Deviation, excluding outliers).
| Number of Projects Analysed | Mean cost per m2 - outliers included | Mean cost per m2 - outliers excluded | Expected range of cost per m2 |
|---|---|---|---|
| 300 | £1,810 | £1,634 | £739 - £2,528 |
Remediation area
The overall unit cost per m2 can be viewed by area of cladding remediated to analyse the effect the area of cladding has on the unit cost. Analysis has shown that the area of cladding coverage is the biggest general determinant of cost per m2 with buildings with smaller areas of remediation having a higher unit cost than projects with larger areas of remediation. Building height was not found to be a predictor of unit cost. Location was found to be a factor due to variance in labour costs and market competition.
Figure 1 shows the mean cost and expected range (excluding outliers) against the area of cladding remediated.
Mean project cost and expected cost range against area of cladding remediated
Figure 1: Projects with lower cladding areas remediated have higher and more varied unit costs
Projects with buildings with less than 500m2 of cladding have the highest mean cost per m2 of cladding remediated at £2,386 per m2, with between £1,011 and £3,760 per m2 considered the expected range. Projects with buildings with more than 5000m2 of cladding have the lowest mean cost per m2 at £1,194 with between £674 and £1,714 as the expected range.
Table 2: Mean cost per m2 cladding remediated by area of cladding, including the expected cost range (mean cost plus/minus 1 Standard Deviation, excluding outliers).
| Area of cladding remediated | No. of projects analysed | Mean cost – outliers included | Mean cost – outliers excluded | Expected range of cost |
|---|---|---|---|---|
| All projects | 300 | £1,810 | £1,634 | £739 - £2,528 |
| Less than 500m | 44 | £3,076 | £2,386 | £1,011 - £3,760 |
| 500-1000m | 34 | £2,123 | £1,918 | £937 - £2,899 |
| 1000-2000m | 63 | £1,830 | £1,678 | £1,013 - £2,343 |
| 2000-3000m | 48 | £1,458 | £1,404 | £774 - £2,034 |
| 3000-5000m | 58 | £1,500 | £1,500 | £817 - £2,182 |
| 5000m+ | 53 | £1,194 | £1,194 | £674 - £1,714 |
In addition, buildings with higher cladding areas remediated not only have a lower cost per m2 but also have a smaller cost range than those applications with less cladding coverage. This is because there is less variability in the project scope in higher area projects and exceptional cost items have lesser percentage impacts due to larger overall costs.
Elemental unit cost
The cost per m2 of cladding remediated can be broken down on an elemental basis. The figure below shows the proportion of spend on each cost element. This data is the result of the aggregation and averaging of 300 projects with buildings of varying cladding coverages.
The cost of removing and replacing the cladding makes up the greatest proportion of spend (44% on average). This is primarily driven by the complexity of the cladding makeup. This is followed by Main Contractor’s Preliminaries (16%) and Access (13%), on average.
Elemental unit costs per square metre of cladding remediated
Text version:
| Cost element | Mean cost per m2 | Cumulative % of total cost |
|---|---|---|
| Cladding | £770 | 44% |
| Main contractor’s preliminaries | £277 | 60% |
| Access (e.g. scaffolding or mast climber) | £234 | 74% |
| Main contractor’s overheads and profit | £147 | 82% |
| Professional fees - post tender stage | £135 | 90% |
| Professional fees - feasibility stage | £97 | 95% |
| Client costs | £82 | 100% |
Figure 2: Spend on each cost element, including proportion of total cost. Removal/replacement of cladding makes up the greatest proportion of spend.
Each element can also be individually viewed against the area of cladding remediated. An example is shown below for the Removal/Replacement of Cladding cost element.
Table 3: The mean cost per m2 for removal/replacement of cladding, with the expected cost range (mean cost plus/minus 1 Standard Deviation, excluding outliers).
| Area of cladding remediated | No. of projects analysed | Mean cost – outliers included | Mean cost – outliers excluded | Expected range of cost |
|---|---|---|---|---|
| All projects | 300 | £827 | £770 | £393 - £1,147 |
| Less than 500m | 44 | £1,126 | £924 | £426 - £1,423 |
| 500-1000m | 34 | £906 | £824 | £447 - £1,200 |
| 1000-2000m | 63 | £864 | £819 | £480 - £1,159 |
| 2000-3000m | 48 | £722 | £683 | £355 - £1,011 |
| 3000-5000m | 58 | £762 | £762 | £398 - £1,126 |
| 5000m+ | 53 | £651 | £651 | £353 - £949 |
Data for the other cost elements can be found in the supplementary tables referred to at the bottom of this publication.
How this data can be used
By applicants to the Building Safety Fund, their cost consultants and cladding remediation contractors
This data allows better estimation of the cost of an individual project, to:
- empower applicants and their cost consultants in their negotiations with remediation contractors as part of the competitive tendering process
- give additional data to contractors to support their cost estimates
- enable preparation of more data-driven pre-tender cost plans when applying for pre-tender services funding
- support assessment of taxpayer value for money
By MHCLG
The data will be used to:
- better understand the estimated cost of projects applying to the remediation funds, and to provide a benchmark as to what the overall cost range of individual projects should be
- ensure that the level of funding provided is reasonable and in line with public funding guidelines
- engage with the remediation market to ensure the data meets their needs and expectations
Accompanying tables
See the accompanying management information tables.
The tables provide data on:
- The overall cost per m2 of cladding remediated for high-rise non-ACM buildings by area of cladding remediated.
- The elemental cost per m2 of cladding remediated for high-rise non-ACM buildings by area of cladding remediated. This data is broken down into key cost categories, including access, professional fees, contractors’ preliminaries and cost of cladding.
Further releases
Further data will be released at periodic intervals to provide a dataset on mid-rise (11-18m) buildings, and an updated dataset on high-rise (18m+) buildings.