Independent Assurance: Programme: Cladding Remediation Project Assessment Review (PAR)

5. Review Team findings and recommendations

5.1 Business case

[Redacted]

Work is continuing on a long form agreement with developers for them to pay the costs of remediation of their buildings. This is being modelled on the accord developed by the UK Government for cladding remediation in England. This agreement will not vary much from the UK accord as it is understood that it will be very difficult to get UK wide developers to agree to different standards in different jurisdictions. Scottish Government will look to incorporate the Responsible Actors provisions of the UK legislation as they develop their own legislative proposals. In England , developers refusing to sign the accord will be deemed legally to be not Responsible Actors and banned from obtaining planning permission in the future. It has already been demonstrated that this declaration can have a significant impact on the developer's share price.

A stock take/census of buildings is underway to scope the number of buildings at risk and the likely amount of work needed, and until this is completed the total cost envelope cannot be defined.

Currently, it is estimated there are circa 1,000 high rise and 5,000 medium rise buildings within the scope of the programme based on data currently available. The stock census of buildings is planned to complete by the autumn of 2023 to refine this further and help to inform the full scope of the problem in terms of building complexity. This work will be undertaken by expert surveyors engaged through a competitive procurement. Defining where the financial liabilities for remediation lie and what contributions should be made by homeowners will be required as input to the OBC and for effective programme planning and implementation. As SBAs progress it is likely other issues with buildings will be identified, many of which will be outside the scope of this programme to address. The Review Team heard that there is pressure from some quarters to change the criteria of buildings to be considered as in scope. Scope creep is something which is a major cause of programme and project failure. It will need to be resisted strongly given the political sensitivity of the cladding remediation programme. In doing this Executive Team (ET) support will be critical. It will be vital to maintain focus on the core objectives of the programme to avoid any scope creep which could ultimately make it unaffordable and even undeliverable.

There is a pilot set of buildings in place which is designed to test out the approach needed for remediation and the likely scope of work on an individual building. These will be surveyed using the Single Building Assessment (SBA). The pilot was set at 26 buildings but it is now 105 buildings. It is not clear why this number has increased. The view was expressed that this amounted to scope creep and was too high a number to be manageable as a pilot at this stage and with the resources available. The Review Team consider that the original target pilot of 26 buildings is a sensible size and that 105 buildings represents more a business as usual operational sizing.

Recommendation 1: Review the pilot buildings scope with a view to reducing the number and redefining the criteria for inclusion.

Recommendation 2: Maintain strong and active management to prevent scope creep.

[Redacted]

5.2 Governance

There is a Programme Board which appears to be working well and has the appropriate representation. The ET acts as a sponsoring body and has taken a close interest in the programme. This has contributed to the increase in progress and is to be welcomed. The Review team consider that a continuing close interest by ET will be beneficial to the programme.

The Review Team understands that a new Directorate will be created with a Director and an additional Deputy Director. This will enhance the programme delivery and governance.

There is a stakeholder forum which provides input into the Programme Board and appears to be working well. This is discussed elsewhere in this report.

5.3 Critical Incident Management

The programme had to respond to a critical incident – [Redacted]. A Critical Incident was established with a Gold, Silver and Bronze command structure. The incident was reported to have worked well with active co-operation of [Redacted] and other key actors. The situation was managed without the need to decant residents. The incident revealed a gap in the necessary statutory powers to do such things as immediately close streets for access to the building for remediation and decanting residents.

The Review Team understands that a separate workstream is being set-up to manage Critical Incidents to have a separate team to deal with them and thus avoid the need to remove staff from their normal programme activity. It is known that another [Redacted] building is in need of similar action and there are likely to be more uncovered as the surveys progress. There are lessons to be learnt from the incident and these are being recorded. Other authorities who have responsibility for managing critical incidents run training exercises and have defined processes and command and control structures. The Review Team considers that the programme would benefit from running workshops with key actors to build upon the learning from [Redacted]. It would be beneficial to run an exercise to rehearse participants in their roles.

Recommendation 3: Set-up a series of workshops to develop and consolidate an approach, procedures and practices for dealing with Critical Incidents

5.4 Communications and Stakeholder Management

Effective communication with all stakeholders will be a vital ingredient to success. To date, from the evidence seen by the Review Team, the need for this is well understood by the programme but the amount of effort able to be applied has been limited. There is a risk this could lead to frustration among the stakeholder community if not properly addressed. Regular communications will help to re-assure homeowners and other stakeholders that the programme is on track to achieve its main aims and solve the problems that have blighted properties.

That said, the Review Team has heard and seen evidence of strong stakeholder buy-in at ET level and at senior levels across government and the wider stakeholder community. This is to be applauded and the need for this to be nurtured and further strengthened cannot be overstated.

A Cladding Stakeholder Group is in place with wide representation and meetings are held approximately monthly which, by and large, appear to be working well. This should continue and will require increasing attention as building assessments ramp-up and lessons need to be taken onboard and shared. This is a good forum for cross checking the impact of new building regulations to ensure that the consequences for this programme are fully considered and properly understood before publication.

To build on the good but necessarily limited work done to date, it will be important to ensure that a dedicated stakeholder communications team is resourced and enabled to deliver against a communications strategy which can take advantage of the panoply of modern tools available, particularly given the need to reach out to homeowners who will want to see a path to resolution of the cladding problems.

Recommendation 4: Ensure a dedicated and properly resourced communications team is created to ensure effective stakeholder communication is strengthened during the next phases of the programme

5.5 Resources

The programme team is in the process of expanding from a single division into a directorate with two divisions. This will increase the level of senior oversight, aid the process of effective decision making and add resilience to the senior team. The Review Team understands that one division will focus on policy, legislation (including the accord) and strategic design while the other will focus on operational delivery, including communications, technical design, remediation projects and incident management. This is a welcome step forward and will ensure the team is better able to deliver the pilot, due to complete in 2023, learn the lessons from it, and handle the many day-to-day issues that arise whilst maintaining a keen focus on the core aims. [Redacted].

The programme team has until now had to work within resource constraints to deliver plans and outcomes as best it can, which in some instances has required a somewhat heroic effort. This is clearly not sustainable, and the Review Team was pleased to see that staffing levels have recently increased to 30 FTE with approval to expand to 55.

[Redacted].

Recommendation 5: Seek agreement to a running cost budget for the current year sufficient to meet approved staffing levels.

It will be important to ensure that all roles are filled with suitably skilled and experienced staff to meet the many challenges ahead. Scaling up the team and onboarding new members to become effective as quickly as possible will in itself be challenging and will require significant management attention. Clear role definitions will be important so that each team member understands exactly what is expected of them and what they can expect of each other.

The safer buildings accord, which sets out key principles and processes agreed with developers in Scotland, now needs to be enshrined in a legally binding long-form contract to be signed with each developer. This will require a dedicated team most likely with specialist negotiation and legal support on the client side to ensure that the final agreements are fair and balanced and able to underpin the delivery of high-quality services at a price that represents value for the public purse and provides the legal framework to deliver the intended outcomes of the programme.

There is also a pressing need for experienced procurement and sourcing skills from people who understand how best to operate in the construction industry and in accordance with public contracts regulations. An important first step for that team will be to create a comprehensive procurement strategy that sets out what will be needed, by when and by what means the various services and materials will be sourced.

Given the scarcity of resources and the constraints imposed by SG grades, alternative options, such as outsourcing should be considered for a compete business function or set of functions.

Recommendation 6: Ensure that plans are put in place to create a programme procurement strategy that sets out what will be needed, by when and by what means the various services and materials will be sourced

A new Dynamic Purchasing System (DPS) has been implemented, as of March 2023, and at the time of the review there were 5 qualified suppliers on the system ready to go. However, capacity in the marketplace remains constrained and the programme will have a key role in helping to grow market capacity to meet the predicted demand for SBAs, initially to support the pilot phase of 105 buildings, and then to support the full national roll out.

Once the scope of the problem is defined, calibrating the throughput of work will be vital to ensure there is a balance of complex / potential high-risk buildings which are more likely to require remediation blended with those which can be green-lighted quickly. This will ensure the goals of prioritising safety and getting the finance / lending market moving again are addressed in the most efficient way given the capacity and skills available to undertake the work.

5.6 Programme and Risk Management

A programme management office (PMO) is in place and appears properly resourced for the task at this stage.

The Review Team has seen that a programme roadmap and draft programme plan are in place and notes that these have been reviewed and endorsed by the Programme Board. The roadmap currently focuses on the period up to 2025 to reflect the current spending review period and tie-in with the business case. It would be beneficial to share the detailed programme plan across the wider team and appropriate stakeholders as soon as possible as this will serve as a good communications tool, to show what they can expect by when, and to engage them in the planning process which will add significant value for all concerned.

At this stage the programme is broken down into seven ‘swim lanes’, and the Review Team has heard that the PMO meets weekly with team leaders in each swim lane to review progress and track risks and issues, assigning owners to actions, and setting target dates which can be tracked and monitored. This appears to be working well and risks are escalated effectively through the risk registers at programme, directorate and corporate levels for consideration by the appropriate governance boards.

Each swim lane should now be formalised as a project with a project initiation document (PID). This will lay the foundation for the level of rigorous project management that will need to be applied as the programme moves from policy driven inception into fully fledged delivery involving single building assessments leading into potentially complex and expensive remediation works underpinned by contractual agreements.

Recommendation: Set-up swim lane teams as formal projects, each with its own Project Initiation Document (PID)