The Ministry of Housing, Communities and Local Government is not on track to meet its target of fixing problem cladding on flats by 2035 and needs to do more to protect the public from the expected £16.1bn cost of remediation work, according to the National Audit Office.
A report from the public-spending watchdog says it is taking the department longer than expected to find all the buildings that need to be made safe following 2017's Grenfell Tower fire, which claimed 72 lives.
Some 7,200 structures taller than 11m are thought to have dangerous cladding but have yet to be identified and brought into one of MHCLG's remediation programmes, the report said.
So far, 4,771 buildings – accounting for 258,000 homes – have been brought into the portfolio. The NAO found that remediation work had been completed in around a third of these buildings, but had yet to start in half of the portfolio, with lower-rise buildings remaining a particular problem.
The report said the cost of fixing unsafe cladding on all buildings in England above 11m in height is estimated at £16.6bn. MHCLG plans to cap taxpayer contributions for the remediation work at £5.1bn, with the remainder paid for through developer contributions and an anticipated £3.4bn from the yet-to-go-live Building Safety Levy.
However, the report also said MHCLG's Building Safety Fund had incurred potential losses of more than £500,000 through just one case of fraud in the last financial year.
NAO head Gareth Davies said MHCLG had considerable work ahead to make good on its timeline for building remediation and stick to its budget commitments.
"Seven years on from the Grenfell Tower fire, there has been progress, but considerable uncertainty remains regarding the number of buildings needing remediation, costs, timelines and recouping public spending," he said.
"There is a long way to go before all affected buildings are made safe, and risks MHCLG must address if its approach is to succeed.
"Putting the onus on developers to pay and introducing a more proportionate approach to remediation should help to protect taxpayers’ money. Yet it has also created grounds for dispute, causing delays.
"To stick to its £5.1bn cap in the long run, MHCLG needs to ensure that it can recoup funds through successful implementation of the proposed Building Safety Levy."
Among its recommendations, the NAO urged the department to think about whether it could be more transparent about its building remediation programme. It said MHCLG should consider giving residents of affected buildings an indication of how long they may need to wait before their homes are made safe – and also publish a target date for when it expects all remediation work to be complete.
The NAO said MHCLG could also be more transparent with parliament about whether its building remediation work is achieving value for taxpayers' money. It said the department could publish data on the proportion of total buildings for which remediation has started or completed, and a measure of whether the portfolio is on track to achieve a published target date.
The watchdog said MHCLG should also "assess the feasibility" of conducting a measurement exercise to estimate the extent of undetected fraud and error across its remediation portfolio. It said the move would help the department understand the scale of the problem and whether further investigations are needed.
MHCLG said it welcomed the NAO report and would consider the recommendations carefully.
Building safety minister Alex Norris said there was a recognition in Marsham Street and at No.10 that the pace of remediation to make homes safe had been "unacceptably slow".
"This government is taking action – meeting our commitment to invest £5.1bn to remove dangerous cladding and making sure those responsible pay for the rest," he said.
"This government will protect leaseholders and empower regulators to take enforcement action against those building owners who fail to act. Since coming into office, we have ramped up work with local authorities and regulators to speed up remediation and we will set out a Remediation Acceleration Plan soon."