Spring Statement: Ashden’s letter to Jeremy Hunt

The Rt Hon Jeremy Hunt MP

Chancellor of the Exchequer

HM Treasury
The Correspondence and Enquiry Unit
1 Horse Guards Road
London,  SW1A 2HQ

7 March 2023

Dear Chancellor   

The upcoming Spring Statement is a unique opportunity to provide much needed support to households who have faced skyrocketing energy bills over the past 12 months, by targeting support to the most vulnerable and by increasing investment in ECO and other schemes to install energy efficient measures. This is because across the UK, nearly 19 million homes are in need of upgrading as they are below the energy performance certificate (EPC) rating of C.   

Retrofitting our homes at scale, starting now, will enable us to tackle the energy crisis and climate emergency while also boosting growth.  To do this we must urgently train thousands of UK retrofitters to ensure this new funding can be used rapidly and efficiently, by rolling out a comprehensive retrofit skills strategy.   

Our policy briefing, Retrofit: Solving the skills crisis, based on many years’ experience working with SMEs and local authorities, sets out the practical steps needed to do just that.  

Attempts to boost retrofit will fall at the first hurdle without a skilled workforce, trained to deliver low carbon solutions such as insulation and heat pump installation. The worst-case scenario would be ECO targets being missed, and public sector entities having to hand back government funding because they cannot find enough skilled retrofitters to carry out the required volume of work. That is why we are calling on the government to set out a clear long term retrofit policy which includes addressing both the massive underspend on retrofit and the equally huge skills shortage.   

Over 400,000 builders and skilled retrofit professionals are needed, but just 200,000 people currently work on maintaining and upgrading existing homes.  

To build confidence in the construction sector to invest in retrofit training, government must provide long term policy and funding certainty on home energy efficiency, confirming the £9.2 billion committed to retrofit and low carbon heat in the 2019 Conservative manifesto. This must also be accompanied by consistent policy and funding to encourage retrofit by those in the able to pay sector.  

This action is especially urgent considering skyrocketing gas and oil prices compounded by the fact that the UK’s housing stock is one the most energy inefficient in Europe, which means the UK is currently ill equipped to weather the ongoing interconnected climate, energy and cost of living crises. Retrofitting is a key solution to all three crises. Analysis Cambridge Econometrics outlines how insulating homes and installing heat pumps could benefit the  UK economy by £7bn a year and create 140,000 new jobs by 2030.   

Good initiatives are already underway: in Portsmouth, the City Council has partnered with the local college to set up an innovative Net Zero training hub; Low Carbon Academy are training hundreds of retrofitters in Greater Manchester, and construction company B4Box are providing new opportunities to people who have found it hard to access employment.   

To ensure the UK has the skilled practitioners needed to make use of government and private funding, we would urge the UK government to:   

1. Create a retrofit skills mission, with a national retrofit skills plan to include: apprenticeship reform, funding and support for FE colleges, development of skills/career pathways, mentoring of newly qualified retrofitters and a national publicity campaign to attract trainees including women and those from diverse backgrounds.  
2. Integrate skills development into government-funded retrofit schemes by setting minimum procurement criteria to encourage local authorities to stimulate skills development through the retrofit programmes that they commission and deliver, and setting training targets for suppliers delivering ECO Plus. Ensure that government programmes offer long term funding so that skills targets can be achieved, and to minimise risk to SMEs.  
3. Devolution of skills funding to local areas, so local government can work with colleges and employers to put retrofit at the heart of Local Skills Improvement Plans.  
4. Increase the apprenticeship wage for construction apprentices, to reduce the high drop-off rate amongst construction trainees – currently 75% of FE college learners taking construction-related courses do not enter the construction sector.  
5. Reform apprenticeships by revising apprenticeship standards to include retrofit in all trades apprenticeships and making it easier for SMEs to take on apprentices by supporting shared apprenticeship schemes and supporting levy transfer to smaller firms.  
6. Support and fund the FE college sector who train over 100,000 construction workers each year to hire experienced instructors and develop training rigs for retrofit and establish a national partnership between employer organisations and the college sector to scale up retrofit training.   

We believe that a comprehensive retrofit skills policy could deliver multiple benefits enabling Government to cut harmful emissions, tackle fuel poverty and enable long-term financial saving, while also generating decent local jobs right across the country.  Please see our report published in June that outlines how a local approach to retrofit can stimulate demand and strengthen supply chains across the country.   

We would welcome the opportunity to discuss our recommendations with you and share more expert evidence and practical examples on how a nationwide retrofit programme could be scaled up across the UK, bringing climate and economic benefits to every community.    

Yours sincerely   

Giles Bristow 

Interim CEO – Ashden