Cladding removal scheme 'lost £500,000 to fraudsters'

Fraudsters may have stolen £500,000 from a taxpayer-funded scheme aimed at accelerating the removal of dangerous cladding, the public spending watchdog has revealed.

- Jack Simpson

The £4.5bn Building Safety Fund was launched in 2020 to protect leaseholders from the cost of cladding removal in the wake of the Grenfell Tower tragedy after tens of thousands received bills, in some cases for up to £100,000. However, the National Audit Office said the decision to prioritise speed in providing money had increased the risk of fraud.

The NAO report revealed that last autumn the fund was subject to a potential fraud in which £500,000 was paid to a suspected scammer, using a mechanism in which 80% of funding could be paid upfront. After the potential fraud was identified, the Ministry of Housing, Communities and Local Government (MHCLG) commissioned an independent review of the case, which found problems with its processes.

This included a reliance on self-certification, which limited MHCLG's ability to verify details. The review also said the 80% advanced payment structure "increased the opportunity and motivation for fraud".