The Chief Executive sought approval to submit a business case to Welsh Government by 28 February 2022, to secure a provisional offer of funding towards carrying out essential remedial work required to properties in Caerau following the failure of wall insulation work installed in 2012/13.  He also sought Cabinet support for a request to be made for a Council capital allocation to be approved and included as part of that business case submission, to ensure a comprehensive scheme is developed to address all affected properties.

The Chief Executive reported that Cabinet had been advised previously in November 2020 and March 2021 of the failure of wall insulation work, which had shown significant signs of water ingress and damp to properties in Caerau.  He had been given delegated authority by Cabinet to engage with relevant stakeholders involved in the programmes of work to install wall insulation in Caerau in 2012/13 and explore options to address and remedy the failing work identified.  It was also agreed that a further report to Cabinet be presented outlining the outcome of continued engagement with the likes of OFGEM the energy regulator, UK Government and in particular Welsh Government, when any solutions had been agreed.

The Chief Executive reported that 104 properties had wall insulation work carried out in Caerau at that time, with the Council administering the funding for 25 of these properties using the Arbed scheme, through funding granted by Welsh Government.  He stated that the other 79 properties had work completed using the UK Government sponsored community energy saving programme (CESP), with no involvement of the Council in the work.  He informed Cabinet that it had been the Council’s position to find a comprehensive solution with the other stakeholders to address all of the failing wall insulation work, regardless of who funded and administered the original work.

He reported that an offer has been made by the Welsh Government of funding in principle subject to the Council submitting a detailed business case for approval by the deadline of 28 February 2022.  The offer of funding is predicated on an initial outline business case the Council submitted last year and on the basis that this Council will also make a financial contribution towards the overall scheme.  He stated that it was very difficult at this stage to accurately estimate the total cost of the full programme as there are various unknowns, as following a survey undertaken in 2019, the problems existed to varying degrees in the homes surveyed.  He informed Cabinet that the cost to strip off and replace the existing cladding could be based on up to £30,000 per home, with the total cost of the full programme being £3.5m.  On that basis, a request would be made to Council to contribute funding of £855,000.  He stated that discussions continue between the Welsh Government and the UK Government on the possibility of funding through the UK Government ‘Eco’ scheme, which would reduce the overall cost to each contributor. 

The Chief Executive reported that the proposed scheme is intended to improve housing in an electoral ward with some of the most severe socio-economic issues in Wales and will have a positive impact on economic, social and health conditions for local residents.   He also informed Cabinet that the proposed programme of work will impact positively on local residents’ well-being and ensure the original intentions of the energy efficiency schemes carried out in 2012/13 are realised, including better insulated homes and lower energy bills, which will help address fuel poverty issues.  He outlined the financial implications of the remedial work, with an award in principle from Welsh Government of funding of £2.65 million, with the Council’s match funding contribution met from an existing earmarked reserve.    

The Cabinet Member Communities in commending the proposal stated that what is being offered is a complete solution for the affected properties and he apologised profusely to the residents for the failings of the wall insulation work.  He was grateful for the work by officers to secure funding to remedy the defects to the properties in Caerau.    

The Cabinet Member Wellbeing and Future Generations questioned how long residents will have to wait for the remedial work to take place.  The Chief Executive informed Cabinet that firstly, a successful business case would have to be submitted and in the event of that being successful, funding will be allocated over 2 years.  It was hoped that the Council would receive funding by the end of this financial year to enable consultation to take place with residents, prior to a survey being undertaken of the properties.  He stated that it was anticipated that the work will commence in 2022/23, with the bulk of the work taking place in 2023/24. 

The Leader commented that the Council had received an in-principle award of funding and he hoped that the Welsh Government would consider the business case without delay to enable consultation to commence with residents in order to move forward with the remedial work.  The Chief Executive stated that the Welsh Government recognises the need to address the work to the properties as quickly as possible. 

The Deputy Leader recognised the challenges posed by the work to the properties and asked what the possibility of funding was being received from the UK Government.  The Chief Executive informed Cabinet that work to 79 out of the 104 properties had been carried out using the UK Government sponsored Community Energy Saving Programme (CESP) and the Council had no involvement in the work and that funding may be available from the UK Government.  He stated that the Welsh Government had made a commitment to funding, which may in turn see some movement from the UK Government.  He informed Cabinet of the importance in not delaying until UK Government funding was known and Cabinet should proceed as recommended. 

The Cabinet Member Wellbeing and Future Generations questioned which methods would be used to procure the remedial works, given the shortage in construction materials and she also asked for the timescale for the completion of the work.  The Chief Executive stated that the remedial work was specialised in nature and companies expert in this field would be sought as part of the procurement process.  He informed Cabinet that engagement with the residents would take place prior to the procurement process and that realistically most of the remedial work would be undertaken during 2023/24, avoiding the winter months.  The Cabinet Member Wellbeing and Future Generations questioned whether a very tight timescale had been set by the Welsh Government.  The Chief Executive stated that he was reassured by the Welsh Government’s commitment who had recognised the unique circumstances in Caerau.  He also stated that if necessary, funding could be moved forward.   

The Leader questioned whether Building Control will be involved in quality assurance from the outset.  The Chief Executive stated there were different quality standards to be adhered to and that monitoring will be an important part of the process.  He also stated that there is a recognition to get the right people involved with Building Control and that the remedial work will be done well.

The Leader on behalf of Council reiterated the apologies given by the Cabinet Member Communities and reassured residents that the remedial work will be done correctly.  He stated that further information on the remedial works will be shared with residents and local members.

RESOLVED:           That Cabinet:

1.  Noted the award in principle of funding of up to £2.65 million from Welsh Government to carry out essential remedial work required to properties in Caerau, following the failure of wall insulation work installed in 2012/13.

2.  Approved that the Council submits a detailed business case, as required in the offer of funding from Welsh Government, by 28 February 2022, to secure the funding and delegates authority to the Chief Executive and Chief Officer - Finance, Performance and Change for the submission of the business case and to accept any final offer.

3.  Approved that a sum of £855,000 is included as the Council’s estimated contribution towards a total programme of work costing £3.5 million, which will be included within the updated Capital Programme report to be recommended to Council on 9 February 2022.  

4.  Approved implementation of the remedial scheme, including any procurement and ancillary arrangements and delegated authority to the Chief Executive to enter into the necessary arrangements, subject to receipt of the funding from Welsh Government and Council approval of the capital contribution.