A National Audit Office (NAO) report has revealed that a payment was made from the cladding fund to a suspected scammer
The report details a £500,000 payment made from the cladding fund, the tax-funded money for cladding remediation post-Grenfell, was made to suspected fraudsters.
The report highlights that the Government’s policy of speed in cladding remediation leaves more risk for loss in funding fraud.
The report showed the cladding fund may need more than anticipated
The NAO’s report found that 60% of buildings that need remediation have yet to be identified. This is due to the scope of buildings requiring remediation being increased, and now all buildings above 11m tall will need to be examined for unsafe cladding.
Furthermore, of the small number of buildings identified, work had only begun on a half of them, and had been completed on just a third.
The payment last autumn was made to unnamed fraudsters using a scheme in the Building Safety Fund, made to protect leaseholders, that allows for 80% of funding to be paid upfront.
A separate report found issues in the process
After identifying the fraud, the Ministry of Housing, Communities, and Local Government (MHCLG) launched a review of the case and identified several issues in its processes.
These issues include a reliance on self-certification, limiting ability to verify details, as well as the 80% upfront payment structure from the cladding fund only increased the opportunity for fraudsters.
There is also no fraud measurement programme linked to the scheme in an industry that has a history of fraud cases.
Geoffrey Clifton-Brown, the chair of the Public Accounts Committee, said: “The programme is falling behind schedule and MHCLG needs to pick up the pace to get it back on track. There is a long road ahead to resolve the cladding crisis and the government must take steps to better protect the taxpayer. It urgently needs to ensure its fraud controls are working and that developers contribute their fair share to the costs.”
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