Labour accuses government of squandering millions from cladding funds in agents’ fees

“The government’s hands-off approach is blighted by inertia and beset by spiralling costs. Ministers are leaving industry bosses to mark their own homework and refusing to keep tabs on the fees these companies are charging.

“That is why we now need a crack team of engineers and building safety experts to take charge of the situation, in the best interests of homeowners and taxpayers.”

Labour says that official figures on how much managing agents have been paid have not been collated by the Ministry of Housing, Communities and Local Government (MHCLG).

The figures were derived from case studies from across the UK that showed the breakdown in costs for funds accessed by the Building Safety Fund.

Figures found that in Manchester one apartment block saw fees of 4% applied on top of the cost of cladding works, with project managers accruing 10% of the costs of the work. Professional fees totalled 14% of the total works. Projects in Sheffield saw agents taking 6% of the total costs in fees, and the same figure was found on another site in Bristol.

Labour estimates that it will take until 2028 for all buildings to be remediated, with just 10% of Building Safety Fund cash allocated so far.

The fund has seen 2,820 private sector buildings and 94 social sector buildings register for funding, which is available to remove and replace dangerous cladding systems with materials other than aluminium composite material (ACM). The removal of ACM is being funded through a separate programme.

The funds are limited to blocks taller than 18 metres, with those in medium-rise towers stuck waiting for a promised programme of loans that will force them to pay the costs of remediation over decades through their service charges.

Of these, 1,025 have either been deemed ineligible or have withdrawn. Only 156 of the remaining 1,889 are fully approved for funding and the remainder are still being processed or are awaiting further information.

Labour is calling for a new Building Works Agency to be established to take control of the crisis, arguing that relying on industry to solve the crisis has led to spiralling costs and left homeowners living in dangerous and unsellable homes.

The new agency would be accountable to ministers and would decide what works are necessary, commission and pay for them, and then sign the building off as safe at the end of the process.

It would work closely with local authorities and fire chiefs, who have been gathering data and are well placed to know how to manage projects locally.

They would also have the legal powers to pursue those responsible through the courts, and reduce the fees that managing agents and others could charge by directing the remediation process themselves, cutting out middlemen.

MHCLG has been contacted for comment.

A spokesperson for the MHCLG said: “These claims are based on a fundamental misrepresentation of the existing remediation process.

“It is vital that remediation work is professionally managed which is why necessary project administration costs have been factored into the budget of the Building Safety Fund and our cost safeguards ensure they are not excessive.

“The Government is providing £5 billion to remove unsafe cladding from the highest risk buildings and we guarantee all eligible applications to the Building Safety Fund will be able to proceed as quickly as possible.”