Social landlords can play a big role in improving the energy efficiency of the nation’s homes. But they must lobby hard to ensure ministers understand that they will need support to do so, says Martin Wheatley
Last week, housing minister Grant Shapps exhorted social landlords to step up energy-efficiency work on their homes. As well as helping tenants reduce their fuel bills, this would achieve many other benefits such as boosting local employment.
Energy secretary Chris Huhne and climate change minister Greg Barker have been making the same case to the sector for some time, rightly recognising the massive potential in large-scale landlord-led energy efficiency programmes. But those of us whose job it is to assist social tenants, reduce fuel poverty and cut carbon emissions will need to push hard during the consultations on the green deal and the linked energy company obligation subsidy, which end in January, to help ministers understand what is needed to unlock this opportunity.
In contrast to the private sector, the homes in the social sector are owned by relatively few landlords, which means it can bring scale and professional management to the commissioning of energy-efficiency programmes. Social housing is just the place to start building confidence in a nascent finance and installation sector that the imaginative but untried green deal concept can actually work. Many housing associations and councils rightly consider themselves ideally placed to deliver wider neighbourhood or area schemes. Retrofit pioneers like housing association Gentoo and Birmingham Council demonstrate what is possible.
Social landlords’ investment has already resulted in an average energy-efficiency rating some 10 standard assessment procedure, or SAP, points higher than the private sector. But there is massive further potential both to save carbon and cut fuel poverty. Research undertaken for the National Housing Federation by consultancy Camco shows the sector needs to save nearly 3 million tonnes of carbon this decade to achieve its share of the nation’s targets to ultimately reduce CO2 emissions by 80 per cent by 2050. Around 1.2 million social homes require works costing up to £17,000 each. And fuel poverty is not confined to the most inefficient homes - a third of fuel poor households live in homes with a SAP rating higher than 50 (100 being the most energy efficient).
The opportunity and the need are plain to see. The government’s decisions on the design and distribution of its ECO subsidy are key to what happens in reality. Professor John Hills’ interim report on fuel poverty for the Department for Energy and Climate Change published last week, points out that supplier levies could increase the bills of the poorest households by up to 2 per cent of their income by 2020, unless there is a specific focus on using these funds to help the most vulnerable (Inside Housing, 21 October). The report also starkly reminds us that underheated homes cost lives.
The real world
Theoretical calculations that green deal work in social housing could meet the government’s ‘golden rule’ - that savings on energy bills must exceed the value of works carried out - without subsidy need to be tested in the real world. Here, many people on low incomes underheat their homes and will take advantage of a more efficient home to live at a healthy and safe temperature. These people will be understandably wary of agreeing to a green deal charge on their bill which imposes a fixed commitment on a very tight budget.
Housing association Affinity Sutton’s recent future fit study of its refurbishment pilot is just the latest illustration of the need for caution around excluding landlords from accessing any part of ECO funding.
Like banks and installers, energy companies need partners to divest their ECO obligations who can deliver cost-effectively and reliably. Social landlords certainly do not have mountains of cash stashed under their mattresses to subsidise measures themselves, with association balance sheets under unprecedented pressure and government curtailing the potential investment capacity of councils.
Social landlords are passionate about improving their homes and helping tenants save on their fuel bills and the government needs to support us in this. We will energetically make the case for effective support during the consultation. Whether ministers listen will determine not just the future energy efficiency of social housing, but the success of the entire green deal.