Cost of Grenfell Tower disaster soars to nearly £1.2bn | Grenfell Tower fire

The financial cost of the Grenfell Tower disaster has reached nearly £1.2bn – 4,000 times the amount that was saved by replacing fire-retardant cladding with a cheaper combustible alternative during the disastrous refurbishment.

The bulk of the cost is being met from the public purse, dwarfing the compensation to bereaved and survivors paid by companies involved in wrapping the west London council’s block in combustible materials before the fire in June 2017 that killed 72 people.

The £1.17bn known to have been spent or allocated so far is enough to fund more than 10,000 new social homes. The figure is certain to be an underestimate because several organisations involved in the disaster have not disclosed their costs.

Deborah Coles, the director of Inquest, a charity that provides expertise on state-related deaths, said: “The human cost of preventable tragedies is always paramount, but this staggering sum shows how failing to enact change when it is called for has a significant cost to the public purse because death is expensive.

“In 2013, a coroner looking into deaths after a fatal fire at Lakanal House called for fire safety reforms but they didn’t happen. That could have not only saved lives but also more than £1bn to the public purse.”

Nabil Choucair, who lost six members of his family in the fire, described the difference between the overall costs so far and the £150m settlement to bereaved and survivors as a disgrace.

“If they had spent a fraction of this money before the fire and listened to us families, this disaster wouldn’t have happened,” he said. “They tried to make savings at the price of our families and now we are paying that price through our suffering. We all pay for their mistakes at the end of the day.”

The Guardian has established that:

• £469m has been spent or budgeted for its Grenfell response by the Royal Borough of Kensington and Chelsea, which owned the tower and authorised cost-cutting decisions that contributed to the scale of the disaster. A large part of this was required to buy new homes for survivors.

• £291m has been allocated by central government for costs associated with its ownership of the site, which will become a memorial.

• The public inquiry and police investigation, neither of which have yet concluded, have so far cost a combined £231m.

• Arconic, which made the combustible cladding, has spent £35m on lawyers and other advisers, and it recorded a liability of £47m in its accounts for settling civil claims.

• Close to 900 bereaved and survivors have so far received £150m in compensation through civil court proceedings, a figure confirmed in the latest annual accounts of the Department for Levelling Up, Housing and Communities.

The figures come as high court compensation negotiations continue involving dozens of firefighters, police officers and other claimants. A £50m “restorative justice” programme is under way using money obtained from Arconic, the council and others. The council says this “will take the form of the delivery of services to the bereaved and survivors and the immediate community”.

The Grenfell Memorial Commission, which is steered by 10 community members, will this autumn announce its preferred plan for the future of the burnt-out tower. A memorial garden is considered a likely part of the outcome. Meanwhile, companies and organisations that are likely to be criticised in next year’s final public inquiry report have been formally asked for their responses.

The financial consequences of the fire stand in contrast to the money saved in 2014 when the council’s landlord body chose the cheapest contractor’s bid and then shaved £700,000 off that in a “value engineering” exercise. It saved £293,368 by swapping zinc cladding for an aluminium alternative with a combustible polyethylene core. The council has told the inquiry that “cabinet members were never advised that additional expenditure was necessary for safety reasons”.

“Think what this money could have done in terms of preventing deaths,” said Coles, who is calling for a national oversight mechanism to ensure official recommendations for change after contentious deaths are enacted. “We could have proper escape protocols for people living with disabilities, which were rejected by the Home Office partly over cost; removing dangerous cladding and building safe housing.”

The police investigation, which Scotland Yard describes as one of the largest and most complex it has undertaken, has cost more than £60m to date. Operation Northleigh has taken more than 11,000 witness statements and detectives are still working through 130m documents, a Met police spokesperson said.

In total, 40 people have been interviewed under caution as 180 investigators examine possible corporate manslaughter, gross negligence manslaughter, fraud and health and safety offences. No one has yet been charged.

Asked to comment on the cost of the disaster to the council by contrast with the saving from the cladding switch, the council’s leader, Elizabeth Campbell, said: “Our continuing priority is to support the bereaved, survivors and the local community, from providing the help and support people need to the recent resolution of the claims process – an important juncture for those affected … We are committed to learning from the Grenfell tragedy and doing right by the bereaved and survivors.”

The council said it planned to pursue claims “against the other parties also responsible for this tragedy for a share of the costs incurred from the public purse”.

The public inquiry alone has so far cost £170m, not including the legal costs of the companies and organisations involved in the refurbishment that led to the fire.

Rydon, the main contractor, has set aside up to £27m for civil claims, its latest accounts suggest. The London fire brigade has spent £14.5m on legal bills.

In a statement, the Met police said if detectives concluded there was sufficient evidence to consider criminal charges after they had fully examined the findings of the public inquiry’s final report, due next year, a file would be submitted to the Crown Prosecution Service. That suggests charges, if they follow, could come in late 2024 or even into 2025, with trials following later.

“We can only imagine the impact on families of a long and complex investigation and public inquiry and we do understand their frustrations,” a spokesperson said.