Just 1 per cent of social housing a year will benefit from ECO funding
Green deal ‘won’t work’ for social housing
The government’s flagship green deal retrofit scheme will fail to achieve national carbon reduction targets and exacerbate fuel poverty in social housing unless it is amended, experts have warned.
Last week the coalition published its long awaited green deal consultation which confirmed landlords are to be largely excluded from the annual £1.3 billion energy company obligation - meaning the green deal will be hard to deliver.
Under the green deal private companies will install energy efficiency measures at no upfront cost and recoup the cash through resulting savings in energy bills.
Based on current proposals between 0.5 and 1 per cent of the social housing stock each year could benefit from ECO - which is taken from consumers’ energy bills and distributed by energy companies - annually according to exclusive analysis by consultancy Camco.
ECO funding is being split into two pots - a £325 million affordable warmth pot to tackle fuel poverty, which social landlords won’t be able to access - and a £975 million ‘hard to treat’ pot for solid wall properties.
Camco said as there were only 12 per cent of uninsulated solid wall properties in the social sector, this meant that between 25,000 and 50,000 social properties would share £118 million a year.
In September Affinity Sutton’s Future Fit retrofit scheme found just under half of the green deal measures in the social housing sector will need to be paid for through ECO funding.
Jeremy Cape, investment director at Affinity Sutton, said: ‘We don’t have many solid wall homes, so “hard to treat” won’t really help us much. It [ECO] is a drop in the ocean. It’s not enough to encourage social landlords to do green deal. It might enable the government to hit 2020 targets, but not 2050 targets [an 80 per cent carbon cut]. And the fact we are not getting affordable warmth funding is a kick in the teeth.’
Martin Wheatley, a sustainability consultant for the National Housing Federation and the Local Government Association, said: ‘Without moving away from the government’s current proposals, I find it hard to see how the green deal could be extensively used in the social housing sector. Although the majority of fuel poverty is in other tenures, proportionately there is more in social housing.’
Neal Mehta, a consultant at Camco, said without access to affordable warmth funding, the green deal could worsen fuel poverty because properties that are already fuel poor won’t be able to meet the golden rule, whereby savings must exceed the cost of works, so will be under further financial pressure.
Ian Thomson, executive director of asset management at Knowsley Housing Trust, said: ‘The people on low incomes in social housing will be disproportionately paying for this on their bills and not getting any of the benefits.’
Inside Housing’s Green Light campaign is calling for social landlords to be placed on an equal standing with other landlords and homeowners to protect vulnerable tenants from fuel poverty
In numbers: ECO funding
ECO funding available per year
25 per cent
to go to affordable warmth funding, which excludes social housing stock
75 per cent
for carbon reduction through a ‘hard to treat’ fund
12 per cent
of the remaining uninsulated solid wall properties are in the social sector
25,000 to 50,000
properties will benefit from solid wall insulation, representing between 0.5 per cent to 1.0 per cent of the social stock a year