Building standards - compliance plan manager role: cost benefit analysis

2. Literature Review and Data Collection

2.1 Introduction

2.2.1 This section sets out the results of the literature review and data collection process. Given that the CPM role is a new approach to compliance within building standards, the literature review was not expected to identify any studies which would be directly comparable with this project. The focus of the literature review was to identify any information on costs and benefits which could be helpful to the cost benefit assessment.

2.2.2 The cost benefit assessment is seeking to identify any costs and benefits associated with introducing the CPM role. For this analysis, the benefits are essentially “avoided costs” i.e. the benefit of increased compliance should result in fewer building failures and the consequent costs associated with these failures.

2.2.3 The literature review was divided into two parts:

• A general review of articles/research on the costs of rework on construction primarily from academic papers.
• A targeted review of articles published with respect to costs incurred in relation to specific building failures.

2.2 General Literature Results

2.3.1 For many years, the construction industry has suffered from problems of error and rework which can add, substantially, to the overall costs of a project. Research from The Get it Right Initiative^[1] research shows that the total cost of errors in the UK construction industry could be of the order of £10 - £25 billion per annum. It is important to recognise that while these costs relate to errors and rework, they are not all to do with failures in compliance.

2.3.2 Rework in construction is having to do something at least one extra time. The literature identified that rework is a “known unknown” but that there is a high degree of uncertainty about its costs. Table 2.1 provides a summary of results from a range of studies investigating rework. Many of these studies relate to overseas research but there is general recognition that the issues identified are applicable across countries. Full references are provided in Annex A.

2.3.3 The studies highlight a range of issues which should be borne in mind when comparing the results:

• Types of Costs: The literature identified that there are both direct and indirect costs associated with rework. Direct costs are incurred on-site in rectifying the rework while indirect costs are those related to delays, disruption, additional resources etc. Most of the results relate to direct costs, although a few studies have examined indirect costs. Indirect costs are more generally regarded as difficult to monetise but just as important as direct costs.
• Necessary Rework: it is important to note that some rework occurs as a result of a change to the design or build process. This is not rework as a consequence of not getting it right first time, but due to a change in specification.
• Context: the estimates of costs are very specific to the project under consideration, but the studies provide a flavour of the potential costs. While some studies provide “mean” results, a range is often presented which is often very large. This highlights that any results should be used with caution.

Table 2.1: Summary of Results from Studies of Rework in Construction

Source

Get it Right Initiative

Summary

Reviews a number of studies and concludes there is a huge degree of variability in the cost of rework.

Results

Cost of rework estimated to be 5%. Considered to be industry wide average to apply at national level.

Source

Love, P & Li, H (2000)

Summary

Case studies of two projects to quantify causes and costs of rework.

A: 2 x 6 storey residential apartment blocks with underground parking and a swimming pool. Cost Aus $10.96 million.

B: 2 storey industrial warehouse. Cost Aus $4.45 million.

Data relate to direct costs.

Damage by sub-contractor and poor workmanship was the primary cause of rework.

Results

A: rework was 3.15% of original contract cost:

• 2.7% variation rework
• 0.4% non-variation rework
• 0.05% defects

B: rework was 2.4% of original contract cost

• 1.4% non-variation rework
• 1% defects

Source

Love, P (2002)

Summary

Indirect costs are difficult to monetise but can be 3 to 5 times the direct costs.

Indirect costs can arise at the individual, organisational and project level.

Using the case study of residential apartments above (Project A, Love, 2000) some indirect costs were investigated.

Results

Costs related to poor documentation led to 125 requests for information with between 1 and 20 queries per request. Contractor spent 1 week dealing with them and architect employed graduate for 2 months. Costs also included reduced productivity, negative effects on moral and stress which could not be quantified.

Poor workmanship led to 100 minor defects which incurred indirect costs which were 6 times the direct amount e.g. additional waiting, travelling, materials and lost productivity.

Source

Love, P & Edwards, D (2004)

Summary

Project characteristics can influence rework costs.

Using structured questionnaires, causes and costs of rework in 161 construction projects identified.

Results

Mean direct costs 6.4%

Mean indirect costs 5.6%

Total rework costs 12%

The range of direct rework costs was 0.1% to 50%

The range of indirect rework costs was 0% to 50%

Source

Love, P, Smith, J, Ackermann, F, Irani, Z & Teo, P (2018)

Summary

In-depth study of rework costs. Based on 19,600 rework events from 346 projects between 2009 and 2015.

Analysis of direct costs only.

Analysis splits events into 3 categories of severity based on the cost rework. Category 3 is most severe.

Results

Mean cost of rework for a sample of 10 projects from category 3 was 1.71% of original contract value.

Of the 19,000 events:

• 75% were category 1 where cost of rework was less than Aus $2,000. Mean calculated as Aus $ 400.
• 24% were category 2 with a mean cost of Aus $11,100.
• 0.45% were category 3 with a mean cost of Aus $ 341,900 (Approx. £184,000).

Source

Lomas (1996)

Summary

Case study of Australian construction company’s introduction of a quality assurance system.

Results

Prior or QA system, rework costs were 5% of contract value.

After QA system, rework reduced to less than 1% of contract value in almost all projects.

Source

Forcada, N et al (2017)

Summary

Analysed data from 788 construction rework incidents from 40 Spanish building projects.

Results

Mean cost was 2.75% of original contract value.

Source

Lundkvist, R et al (2014)

Summary

Case study of Swedish conference centre where work to be inspected by 3^rd party to ensure work is without defects. Project had main contractor and 7 sub-contractors.

Results

Continual inspections allow non-conformances to be discovered earlier, but they result in fixing mistakes after they have been made rather than preventing them in the first place.

Classification of defect data was difficult due to a lack of common vocabulary and contextual data was often missing.

Majority of defects documented at final inspection are superficial.

Source

Marosszeky (2006)

Summary

Australian study.

Results

Rework costs were, on average, 5.5% of contract value:

• 2.75% direct costs
• 1.75% indirect costs for main contractors
• 1% indirect costs for subcontractors.

Source

Palaneeswaran

Summary

Quotes a range of results.

Results

Construction Industry Development Authority in Australia – the average cost of rework in projects without a formal quality management system was 6.5% of contract value.

Average cost of rework for projects with a quality system was 0.72% of contract value.

A study of seven Swedish construction projects found costs of rework in the range 2.3% to 9.3% of contract value.

Source

Construction Quality Assurance Initiative, Scottish Futures Trust

Summary

Four pilot projects to encourage collaborative dialogue to achieve compliant high quality outcomes. Projects encouraged to form single quality team and implement initiatives to make a difference in the way site operations, quality controls, inspections etc. were carried out.

Results

Regarding quality assurance:

Queensferry High School: extended scope of works for the independent tester/clerk of works. Clerk works escalated to full-time role and covered building fabric and M&E.

Alness Academy: local authority clerk of works covered works on regular basis

Greenock Health Centre and Stobhill Mental Health Unit: NHS appointed a quality consultant (building surveyor) to review design, quality management plans and site visits.

All projects used technology to manage information.

Source

Lychgate Projects (2017) for LABC

Summary

Plan assessment interventions are areas of non-compliance with building regulations.

Sought to understand the number of interventions, risk level of non-compliance, value added advice given and customers benefits from plan assessment.

Online survey to quantify number of interventions at plan assessment stage.

Phone survey to understand benefits of plan assessment to customers.

Results

LABC estimated to assess 91,000 project plans and 476,000 areas of non-compliance identified.

Most common areas of non-compliance are structures (27% of interventions) and fire (19% of interventions).

Benefits identified by customers include “the prevention of compliance issues which could otherwise have to be put right at a later date.

25% of interventions deemed to be high or intolerable risk.

Assessed the severity of non-compliance on scale of 1-5 (low to high/intolerable).

49% issues assessed 4 or 5 for structures (31% rated 5).

58% issues assessed 4 or 5 for fire (37% rated 5).

Customer survey found:

65% found initial plan assessment had prevented at least one non-compliance issue.

Source

LABC, (2018)

Summary

Study to review how the social benefit of building control interventions could be quantified and valued. Focus on public service building control interventions through the plan assessment process.

Based on Lychgate Projects who analysed the number of building control interventions annually and by part. Assessed 90,731 plans with 5.25 interventions per plan – 27% structures, 19% fire, 53% other parts.

Costs were based on sample of 20 LAs costs for plan assessment and inspection.

Results

Of 476,000 interventions, >74,000 concerned high or intolerable risks on structural or fire safety.

For structures, 49% are high risk/intolerable.

For fire, 58% are high risk intolerable.

Average cost for interventions £869.31 (structure £238, fire £167, other £464).

LABC interventions worth £1.85 billion in 2016/7.

Net benefit to UK per plan assessed is £20,600.

Conclusions from General Literature Review

2.3.4 The difficulty in deriving estimates of the cost of rework is exacerbated by the fact that rework costs do not appear to be routinely measured. From the studies in Table 2.1, the following observations can be made:

• Direct rework costs are estimated to be in the range 1.71%^[2] to 9.3% of contract value.
• At the individual study level, there can be a very large range in the results e.g. Love and Edwards (2004) found the mean percentage of costs was 6.4% with a range of 0.1% to 50%.
• Indirect costs were not quantified or monetised as frequently as direct costs, but two studies estimated them to be 2.75% and 5.6% of contract value. Other studies noted they could be up to five or six times the direct cost.
• It is suggested that rework can be considered a normal part of operations. This appears to derive from an environment which puts emphasis on making good non-conformances rather than preventing them from arising in the first place.
• The results of the LABC study found that the plan assessment process is beneficial in identifying areas of non-compliance which, with respect to structures and fire, were usually high-risk or intolerable in terms of non-compliance severity.

2.3.5 With regard to the last bullet point, it should be noted that, in Scotland, all building warrant work must be approved (plan assessed) prior to work commencing on-site, regardless of the scale of the project. As a result, the risk of non-compliance at the design stage has already been reduced under the Scottish building standards.

2.3.6 The LABC study found that the net benefit to the UK per plan assessed is £20,600. Assuming this level of benefit per plan assessed and that there are around 45,000 building warrant applications in Scotland each year, the benefit of this pre-emptive process is estimated to be approximately £927 million per annum. This is approximately 0.8% of the gross value added of the Scottish construction industry^[3].

2.3 Specific Building Failures

2.4.1 The second part of the literature review was a targeted review of published information on specific building failures. The review focused on the high-risk categories to be covered by the new CPM role and sought to identify any costs associated with rectifying the failure or incurred as a result of the failure. It is recognised that not all the building failures will be due to non-compliance, but there could be consequential costs associated with buildings not being available etc. which would be helpful for the analysis.

2.4.2 A range of sources were reviewed during the research with Annex A providing links to the main information sources for each incident. The analysis focused on the following areas and incidents:

• High Rise Housing: Grenfell Tower; Chalcots Estate, Camden; Ledbury Estate, Southwark.
• Schools: Edinburgh Schools; NW Campus, Dumfries; Woodmill School, Dunfermline.
• Hospitals: Queen Elizabeth University Hospital (QEUH), Glasgow; Royal Hospital for Children and Young People (RHCYP), Edinburgh.
• Leisure Centres: DG One, Dumfries.
• Care Homes: Rosepark, Lanarkshire.

High Rise Housing

2.4.3 Grenfell Tower is a 24 storey tower block^[4] which had been refurbished between 2014 and 2016 at a cost of £8.4 million. Combustible aluminium panels were substituted for the planned non-combustible zinc panels on the exterior of the block. Fire broke out in the tower block in June 2017 with the defective cladding providing fuel to the fire. There were 72 fatalities in the fire and 70 injuries. It is understood that the Tower will now be demolished.

2.4.4 The Audit and Transparency Committee Report^[5] of The Royal Borough of Kensington and Chelsea provides details on the costs incurred by the council between 2017/8 and 2020/21. The main costs incurred by the council to date include:

• Capital costs of £221.4 million.
• Revenue spend on response of £134.8 million (June 2017 to March 2019).
• Revenue spend on recovery of £50 million (April 2019 to March 2024).
• Corporate costs of £31 million (April 2019 to March 2024).

2.4.5 Adding these components together, the cost of the fire to the council is over £400 million. Table 2.2 provides a more detailed breakdown of these costs. One of the largest single components of the costs to date has been the acquisition of properties to house the Grenfell residents. There have also been substantial social and well-being costs dealing with the survivors of the incident.

2.4.6 There are also other costs associated with the Grenfell fire including:

• Fire response costs: No costs are available but at least 40 fire appliances and 20 ambulances with their associated crews^[6] were in attendance.
• Public inquiry costs: As at March 2021, the cost of the public inquiry is £117 million of which £61 million are legal costs and £10 million are expert advisor costs.
• Companies involved in manufacturing the cladding and builders have spent tens of millions in legal costs in their defence against the Metropolitan Police Investigation including Arconic (cladding manufacturers) who had spent £30 million on consultants and lawyers by late 2019.
• Legal costs for London Fire Commissioner of £5.8 million between 2019/20 and 2020/21.

2.4.7 The costs arising from the Grenfell Tower fire across organisations are substantial and taken together, are in excess of £0.5 billion.

Table 2.1: Grenfell Tower Costs incurred by Local Authority, £m

Capital Expenditure	221.4
Acquisition of properties to rehouse residents	177.4
Site and premises	30.4
Leaseholder compensation to 16 leaseholders	13.6
Response (June 2017 to March 2019)	134.8
Housing	56.5
Emergency	33
Temporary and permanent	14
Property maintenance	3.5
Compensation to registered providers	2.6
Social Care and Well-Being	41.2
Client support	12.9
Hardship payments	13
Immediate support at local centres	5.1
Support provided by other organisations	8
Site and Premises	11
Support Services including consultancy	18.4
Corporate Services, primarily legal costs	7.6
Recovery (April 2019 to March 2024)	50
Corporate Costs (primarily legal to support Inquiry)	30.8
Total	437

2.4.8 Waddell Court is a high-rise block of flats in Glasgow where a fire occurred on the fifth floor in 2009 resulting in one fatality and two people needing hospital treatment. Of the 77 residents in Waddell Court, only 18 were able to return to their homes in the immediate aftermath of the fire with some tenants out of their homes for many months. The cost of rehousing, refurbishment and loss of revenue was estimated at £2.6 million. A small number of tenants were out of their homes for almost one year.

2.4.9 Chalcots Estate in Camden comprises five tower blocks, four of which are 23 storeys high and one which is 19 storeys. The estate was significantly refurbished between 2006 and 2009 and following the Grenfell fire, local authority officers identified similarities between Grenfell and a number of the tower blocks with respect to the cladding systems. A fire inspection concluded that fire resistance in the communal areas was not satisfactory and it would affect the ability of residents to be safely evacuated in the event of a fire.

2.4.10 The local authority decided to evacuate residents from the four 23 storey buildings which housed over 2,100 people in 636 flats. Not all elderly residents vacated their flats as they felt it was too disruptive and difficult to cope with given specific personal circumstances. Some 541 flats were evacuated by the end of June 2017.

2.4.11 In terms of the cost of carrying out repair work, the following costs were incurred:

• £16.5 million on permanent fire safety measures between 2017 and 2019 comprising £12.5 million on cladding removal and £3.9 million on fire doors;
• £20.9 million on interim fire safety measures including £8.5 million on waking watch patrols prior to the cladding being removed;
• £1.4 million on other forms of repair and maintenance; and
• A contract to install new cladding is to be tendered later in 2021, which could be in the region of £90 million.

2.4.12 Other costs associated with the flats not being available included:

• Temporary accommodation and security costs of £15 million;
• £100 per household to cover emergency costs and £20 per person per day on an ongoing basis. Given the number of people housed in the flats, these costs could be in excess of £1 million within a few weeks.

2.4.13 There were also a range of other social/community costs including

• The exacerbation of pre-existing mental health conditions as a result of the trauma of the evacuation;
• The establishment of a team of 11 social workers and other social care staff to work with residents who might need support. During the evacuation period, 150 new people were screened by this team and 80 went on to receive services from adult social care.

2.4.14 The Council has submitted a £130 million legal claim against organisations involved in the refurbishment of the estate between 2006 and 2009.

2.4.15 Ledbury Estate in Southwark comprises four 13 storey tower blocks, two and four storey maisonettes, a community hall and several shops. The four towers contain 224 flats, 56 flats per tower. The tower blocks were built using the 'Large Panel System' (LPS) method of construction, whereby giant concrete slabs were bolted together onsite. There is no supporting frame and the slabs effectively use gravity to support their own weight and hold the panels together. It is understood that these were originally designed to be no more than six storeys high.

2.4.16 Residents at the Ledbury Estate had been reporting various issues of disrepair to Southwark Council over the past few decades. One of the most concerning issues reported for many years were cracks and gaps, affecting the walls, in particular on the vertical and horizontal joints where the floor meets the wall, and the walls meet the ceiling.

2.4.17 LPS built blocks are known to have a tendency to structural movement, as the panels tend to bow outwards during warm weather, opening up a gap at floor and ceiling level which presents a major fire risk as it prevents effective 'compartmentation' of each flat.

2.4.18 Following the Grenfell fire, the safety of the four towers was called into question and 24-hour fire marshals were brought in to patrol the tower blocks. It was discovered that these gaps affected most of the properties in all four towers. Emergency works were undertaken to temporarily fire-stop the gaps using mastic and sealant.

2.4.19 There was a further issue relating to gas supply to the towers which was considered unsafe. A consultant’s report concluded that the towers required significant strengthening to bring them up to meet the basic current building regulations for occupation, even without a gas supply. The towers had been at risk of progressive collapse for decades. Residents would have to move from their homes before major works are carried out to strengthen the towers and provide a permanent fire stopping solution to the gaps and cracks.

2.4.20 An option appraisal has been undertaken to look at the future of the towers including demolition, refurbishment and new build options. A final decision has not been made, but it is understood that the cost to refurbish and strengthen the towers to meet health and safety essential requirements is of the order of £100 million.

2.4.21 The council has incurred a range of other costs^[7] which are summarised in Table 2.3.

Table 2.3: Ledbury Estate Costs incurred by Local Authority, £m

Initial Repairs and Investigations	Structural Consultants	0.2
	Related to fire systems	0.6
	Fire Marshalls	2.2
	Related to heating system	4.7
Costs Related to Evacuation	Acquisition of 80 properties	25.8
	Removal costs and compensation	0.7
	Staff and rent costs for TRA hall	0.6
	Other costs	0.5
Total		35.3

Schools

2.4.22 Edinburgh Schools: The collapse of part of an external wall at Oxgangs Primary School in Edinburgh in 2016 was found to be caused by poor quality construction in the building of the wall which failed to achieve the required minimum standards. Subsequent investigations led to the discovery of defects in the construction of the external walls of the 16 other schools in Edinburgh procured through the Edinburgh Schools Project (ESP) PPP1 contract. Further defects were also reported in the surveys of fire-stopping in the PPP1 schools.

2.4.23 The wall collapse led to the closure of all 17 schools for several months as a precaution with almost 8,400 pupils affected^[8].

2.4.24 Remediation work was undertaken in all 17 schools, but the cost of the remedial work is not known. However, the City of Edinburgh Council was entitled to make deductions from the unitary payments to the ESP for service failures arising from non-availability of schools in relation to defects in construction. Total deductions of £5.14 million were made in 2016.

2.4.25 As a consequence of the schools closures, the following costs were incurred:

• Alternative teaching accommodation: the hiring of 24 temporary classrooms and transport of school furniture and equipment to new locations.
• Alternative transport for pupils requiring over 70 coaches per day.
• Alternative catering arrangements.

2.4.26 An Audit Scotland report identified that the Council incurred direct costs of £3.1 million.

2.4.27 In addition to the costs incurred in providing alternative education provision, some wider social costs were identified including:

• Disruption to pupils, parents and teachers in some cases causing increased anxiety.
• The implications of increased travel time to new school locations resulted in a loss of teaching/classroom time of 12 minutes per pupil per day for secondary pupils and 71 minutes per pupil per day for primary pupils. However, the evidence suggests that there was a limited negative impact on educational attainment.

2.4.28 Following the Oxgangs incident, local authorities across Scotland undertook investigative work on similar buildings, but the cost of this work in not known. The Inquiry into the Edinburgh Schools^[9] failures identified four schools outside Edinburgh which suffered damage in high winds and four other authorities who had to undertake remediation works following structural surveys. No cost data or information on consequential costs are available.

2.4.29 North West Campus is a new build school in Dumfries which was due to open in July 2018 providing nursery, primary and secondary education. Following the collapse of a ceiling during the construction phase and other incidents while in use, the Campus was closed for seven months to rectify a number of defects.

2.4.30 There are no costs available on the remedial works required, the costs incurred in providing education in alternative facilities (which included reopening a school which had closed to provide temporary classrooms) and other costs e.g. transport. However, it is understood the Council was able to recoup the additional costs incurred through paying less than previously agreed for the building.

2.4.31 A deliberate fire at Woodmill High School, Dunfermline in 2019 led to the closure of the school and considerable work to reinstate the building^[10]. This led to the demolition of sections of the building and temporary modular classroom installed on site. In the four months after the fire, Fife Council incurred costs of £830,000 including demolition, security, alternative accommodation for 1,400 pupils and an insurance excess of £250,000. Two firefighters also required hospital treatment.

Hospitals

2.4.32 Final checks to the building days before the planned opening identified issues with the ventilation system at the Royal Hospital for Children and Young People (RHCYP) in Edinburgh. With a construction cost of £150 million the total cost of this project over the next 25 years will be £432 million (including maintenance and facilities management). NHS Lothian pay a unitary charge of approximately £1.4 million per month.

2.4.33 It is estimated that the ventilation repairs were £16 million in 2019, but there are suggestions that the actual costs were higher.

2.4.34 Other costs incurred by NHS Lothian include:

• £2.06 million to keep the old Sick Children’s hospital open for an additional 15 months.
• £21 million in repayments, remedial work and legal fees between July 2019 and July 2020.

2.4.35 The Queen Elizabeth University Hospital (QEUH) in Glasgow was Scotland’s largest ever publicly funded NHS construction project costing £842 million. Since opening in 2015, the hospital has developed a range of problems related to construction including water and ventilation, plant and building service capacity, and heating issues.

2.4.36 Two deaths linked to infection at the hospital were not found to be connected to the design, build or maintenance of the hospital. However, recommendations were made to replace water, drainage and ventilation systems to minimise infection risk.

2.4.37 There is limited cost information available, but estimates include:

• £2.75 million to repair the water and ventilation system.
• £50 million to rectify issues at the site.

2.4.38 NHS Greater Glasgow and Clyde has estimated damages and losses to be around £73 million including both costs incurred to date and future anticipated costs. Two wards currently remain closed.

2.4.39 As a result of the failings in these two hospital projects, a Public Inquiry was launched to investigate these issues. The latest cost of the ongoing Scottish Hospitals Inquiry to June 2021 is £2.2 million.

Leisure Centres

2.4.40 The Leisure Centre DG One in Dumfries opened in 2008, but shortly after opening, significant failures emerged in relation to the quality of construction of the swimming pool enclosures and the internal tile linings. During the next six years, its effective operation was regularly compromised by failures arising from poor construction quality. Defective construction was found to permeate all parts of the building from the underground drainage through all aspects of structure and fabric up to the construction of the roof. The centre was closed in 2014.

2.4.41 In February 2017, following the opening up of the external walls of the building in accordance with guidance issued following the findings of the Edinburgh Schools Inquiry, significant additional defects were identified that would require the total demolition of the external masonry walls to the main rotunda. Simultaneously, other previously unidentified defects were discovered including a requirement to extend the length of the main pool.

2.4.42 The original cost of the DG One Design and Build contract was £9.5 million, although the project overran and had a final construction cost of £12.7 million.

2.4.43 The initial cost of the remedial contract was £9.8 million, but this increased due to the additional defects identified in 2017 and the final reinstatement cost of DG One is estimated to be £21 million.

2.4.44 While the leisure centre was closed, a temporary swimming pool was established and gym facilities were located in a local hall. It is estimated that the costs to the council associated with the closure of DG One and its pursuit of a legal claim against the design and build contractor totalled over £4.2 million. It is understood that a settlement of £9.5 million was received from the contractor.

Care Homes

2.4.45 A fire in Rosepark Care Home in 2004 resulted in 14 fatalities. There is no cost information available.

Conclusions on Specific Incidents.

2.3.1The main conclusions to be drawn from the review of specific incidents are:

• The actual costs incurred in addressing the failure are very specific to the particular failure.
• When fire is the cause of failure, the chance of injury/fatality appears to be significantly higher. While not all fires occur as a result of non-compliance issues, some investigations have found fire compliance issues.
• Investigations into the cause of some major failures have led to the discovery of other potential incidents across similar building types resulting in considerable expense.
• Where buildings have been built on a Design and Build basis, there is very little information on the costs of rectifying the repair.

2.3.2 Tables 2.4 and 2.5 summarise the data collected by broad cost category for high-rise residential and other high-risk building types respectively. For comparative purposes and to assist with the cost benefit analysis, a unit of measurement has been included to try to establish a cost per flat, pupil, bed etc.

2.3.3 It is difficult to draw conclusions across incidents given the variability in the information available, but the analysis suggests that costs are higher if they involve the provision of alternative housing.

2.4 Other Data

2.5.1 As most of the costs identified in the general literature review are based on the original contact value, the analysis will require a number of assumptions to be made regarding the cost of constructing high-risk building.

2.5.2 The Scottish Futures Trust has data on a range of building projects and these have been examined to determine the average construction cost of high-risk buildings. Table 2.6 provides a summary of the data. The Table shows the number of projects reviewed, the mean cost of these projects, the median cost of these projects and the range of costs. The average duration of the construction period is also shown in years.

Table 2.4: Summary of Costs from High-Rise Residential Building Failures, £ million

		Grenfell Tower	Chalcots Estate	Ledbury Estate	Waddell Court
Costs of Rectifying the Failure		30.41	127.43	97.75	n/a
Injuries		70	0	0	2
Fatalities		72	0	0	1
Provision of Housing		247.42	15.0	26.4	2.6
Social Costs		41.2	Not available4	n/a	n/a
Other inc. Corporate & Recovery		117.9	n/a	1.06	n/a
Public Inquiry & Other Parties Costs		153.5	n/a	n/a	n/a
Legal Claim		n/a	130	n/a	n/a
No. Flats		127	636	224	55 tenants evacuated for varying lengths of time
Cost per flat:	Rectify failure	0.239	0.200	0.436
	Provide Housing	1.948	0.024	0.118
	Social Costs	0.324
	Other Costs	0.928		0.004

Notes:

1. Excludes demolition

2. Includes £177.5 million acquiring properties

3. Includes £20.9 million and £16.5 million on interim and permanent fire safety measures respectively and estimated £90 million on new cladding

4. Para 2.2.13 provides description of services

5. Includes £7.7 million to address immediate issues and estimate of £90 million to undertake a mixture of refurbishment to higher standards and strengthening of some of the towers and demolition of some of the towers

6. Includes rent of hall, staff, legal, compensation and other costs

Table 2.5 Summary of Costs from Other High-Risk Building Failures, £ million

		Edinburgh Schools	Woodmill School	Sick Kids, Edinburgh	QE University Hospital, Glasgow	DG One
Costs of Rectifying the Failure		n/a 1	0.583	16.04	52.75	21.0
Fatalities		0	0	0	0	0
Injuries		0	2	0	0	0
Alternative Provision		3.1	Included above	2.065	2 wards closed	4.210
Social Costs		n/a2	n/a	n/a	n/a12	n/a
Other inc. Legal, Damages		n/a	n/a	21.06	73.09	n/a
Public Inquiry & Other Parties Costs		0.25	n/a	2.27	2.27	n/a
Insurance excess		n/a	0.25	n/a	n/a	n/a
No. of Units		8,371 pupils	1,400 pupils	242 beds	1,365 beds8	31,600 pop11
Cost per unit	Rectify Failure	n/a	n/a	0.066	0.039	665
	Alt. Provision	370	410	0.009	n/a	133
	Social Costs	n/a	n/a	n/a	n/a	n/a
	Others Costs	n/a	n/a	0.087	0.053	n/a

Notes:

1. Cost of works is not available but City of Edinburgh Council deducted £5.1 million from unitary charge for non-availability of schools

2. See para 2.3.27 for description of other costs

3. Costs include demolition, security and alternative provision

4. Ventilation repair

5. Keeping old hospital open for 15 months

6. Covers repayments, remedial work and legal fees

7. Cost of Hospitals Inquiry covering both Sick Kids and QEU.

8. 1,109 adult beds, 256 beds for children

9. Estimate of damages and losses to date and future. No details

10. Includes costs associated with closure and pursuit of legal claim

11. Population of Dumfries

Table 2.6: Summary of Construction Costs for High-Risk Building Projects,

Type	No. Projects	Mean, £m	Median, £m	Low, £m	High, £m	Av. Duration, years
Residential Care	10	5.9	5.6	1.7	12.9	1.3
Sports Centres	3	10.5	5.2	3.2	23.2	1.5
Libraries/Museums	5	8.2	8.1	3.0	16.0	1.3
Primary Care	29	8.9	6.0	1.1	34.4	1.2
Hospitals	3	57.7	62.0	42.1	68.9	2.5
Primary Schools	21	9.5	7.6	4.4	18.9	1.3
Secondary Schools	33	33.2	32.5	20.2	56.9	1.8
Primary and Secondary Schools	3	31.6	32.8	28.2	33.7	1.9

2.5.3 For most of the project types in Table 2.6 the mean and median costs are quite similar. The main exception relates to sport centres where the mean cost is considerably higher than the median cost. This is a reflection of the projects under examination which ranged from relatively modest (£3.2 million) to very large (£23.2 million) projects.

2.5.4 The average cost of hospital projects in the Table above are also significantly lower than the costs of the RHYPC in Edinburgh and the QEUH in Glasgow which were reviewed in paragraphs 2.3.32 to 2.3.29. These were two very large hospital projects, but are perhaps less representative of the typical costs associated with new buildings in the hospital estate.