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Housing Secretary, Michael Gove, has approved plans to end Waking Watch by installing fire alarms in the buildings that currently have the scheme in place.
The £27m fund was announced in a letter to Permanent Secretary Jeremy Pocklington.
The funding follows £30m Waking Watch Relief Fund, which was announced last year.
In the letter, Gove said: "Waking Watch costs are a national scandal and there is an urgent need to tackle this problem given the detrimental impact it is having on leaseholders. Whilst some building owners have already installed fire alarms, some with the help of the Waking Watch Relief Fund announced last December, I am persuaded that this £27m fund is the quickest and most effective way to correct this scandal which persists.
"It is my judgement that this course of action is clearly in the best interests of the people living in buildings with a Waking Watch. "