Transparency data

Non-ACM High Rise Residential Building Remediation Programme: accounting officer assessment

Updated 6 March 2024

1. Background, context and objectives

In response to the Grenfell Tower fire in 2017, the government announced that it would cover the costs of replacing unsafe non-Aluminium Composite Material (ACM) cladding systems from high-rise residential buildings in England where there is no alternative funding solution. This is covered by the Building Safety Fund. The fund forms part of the Department for Levelling Up, Housing and Communities (DLUHC) Outcome Delivery Plan, setting out the department’s objective to deliver ‘More, better quality, safer, greener and more affordable homes,’ and more specifically to ‘Support building owners to take action to ensure the safety of residents in existing high-rise residential buildings’.

The government announced the Building Safety Fund (BSF) in the Budget on 11 March 2020, with an initial budget of £1 billion to fund the remediation of unsafe non-ACM cladding on high-rise residential buildings. The department carried out an assessment of the programme at the time of launch and concluded that it did not meet the normal tests of Value for Money and a ministerial direction was required. This was received and published on gov.uk in May 2020.

The fund was expanded to £4.5 billion in total in February 2021. The fund covers the costs of eligible works in full on private sector residential buildings with at least one residential building. Funding is also available for social sector residential buildings for the proportion of costs attributable to leaseholders, or in full if the costs of remediation threaten the financial viability of the social sector provider.

The fund was previously open for applications between June and July 2020. The fund re-opened to new registrations on 28 July 2022, with a new proportionate and risk driven approach.

This memorandum is being published now to bring the format of the published assessment into line with other GMPP programmes.

2. Assessment against the Accounting Officer standards

a. Regularity (has legal basis, Parliamentary authority, and Treasury authorisation; and is compatible with the agreed spending budgets)

The funds do not require any new legislation. Grant funding is provided under s.1(1) Infrastructure (Financial Assistance) Act 2012. As per the legislation, HMT consent was sought prior to making any payments. HMT agreed to provide £4.5 billion funding to cover the costs of non-ACM high-rise remediation. The department received the authority to enter into commitments when the programme was launched, and this will be extended through approval of business cases.

There are potential upward and downward pressures on the costs of remediation, but the government intends the public contribution to be limited to £4.5 billion, with the remainder covered by the Building Safety Levy and industry funding commitments under the developer pledge.

My assessment is that the regularity test is satisfied.

b. Propriety (meets the high standards of public conduct and relevant Parliamentary control procedures and expectations)

Distribution of the funds meet the standards governing the use of public funds. Funding is allocated according to published funding guidance. The department publishes regular statistics on the status of remediation and funding applications for buildings in scope of the funds.

My assessment is that the propriety test is satisfied.

c. Value for Money (in comparison to alternative proposals or doing nothing, the proposal delivers value for the Exchequer as a whole)

In the normal course of events, the costs of works being funded by the BSF would be borne by the private sector; the quantifiable public benefits from accelerating work are not sufficiently large to offset the costs to the public sector. The department therefore previously assessed that the fund does not meet the normal tests for value for money. Noting this, the then Secretary of State provided a direction to the department to launch the fund in May 2020 because of the importance of ensuring that these essential public safety works happened at pace. The department is of the view that this assessment remains correct. The department has taken steps to ensure cost effectiveness in the development of the scheme, including recently agreeing with leading housebuilders that they will meet the costs of all life-critical fire safety works on buildings they developed over 11 metres in height.

My assessment is that the value for money test is not satisfied, but the department has taken appropriate action to maximise cost effectiveness following ministers’ direction to establish the fund.

d. Feasibility (can be implemented accurately, sustainably, and to the intended timetable)

The Non-ACM High Rise Residential Building Remediation Programme sits on the Government Major Projects Portfolio (GMPP) and operates as a major programme in line with best practice standards outlined by the Infrastructure Projects Authority (IPA) and their gateway processes. The deliverability and feasibility of these funds is formally assessed and delivery risks are being managed through internal measures. The department is continuing to consider options in order to accelerate the pace of remedial works.

My assessment is that the feasibility test is satisfied.

3. Conclusion

I have prepared this summary to set out the key points which informed my decision. If any of these factors change materially during the lifetime of this project, I undertake to prepare a revised summary, setting out my assessment of them.

This summary will be published on the government’s website (GOV.UK). Copies will be deposited in the Library of the House of Commons, and sent to the Comptroller and Auditor General and Treasury Officer of Accounts.

Jeremy Pocklington, Accounting officer

23 September 2022