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Our homes are responsible for 35% of UK energy use, and emit 20% of our carbon dioxide emissions. We can’t create a low-carbon UK without drastic action to make them more efficient. Furthermore, cold, damp and inefficient homes are unhealthy to live in and bring misery to residents.
With 80 to 85% of today’s homes likely to still be standing in 2050, and the UK’s housing stock still one of the most energy inefficient in Europe, the country must carry out a national programme of upgrades at lightning speed.
Decisive actions by national and local government, as well as close co-ordination between the two, will be needed to deliver this retrofit revolution. This briefing aims to spur on that action.
Our briefing draws on insights from Ashden’s award process – a rigorous annual search for pioneering climate innovation – as well as over 40 case studies of council climate action prepared with Friends of the Earth. It is also informed by the experiences and views of councils in our regional local authority learning networks, and our partnership work with organisations such as the UK Green Building Council, London South Bank University and Nationwide Building Society.
Learn more about Ashden’s work with local authorities
This briefing provides direction to central and local government policy makers on what steps they can take, individually and in partnership, to rapidly decarbonise the heating of the UK’s housing stock. It shares case studies demonstrating how councils are navigating challenges to roll out efficient and cost-effective retrofit programmes.
With the right support from national government, this work can be scaled up and replicated across the country.
This task is especially urgent considering that councils and families are being hit hard by the biggest cost of living rise in 50 years. According to the Resolution Foundation, the number of English households in ‘fuel stress’ has doubled from 2.5 to 5 million as a result of the price cap rising in April 2022, with another 2.5 million households at risk in October if the price cap rises again to £2,500.
There is an urgent need to retrofit our buildings to save on energy bills, as well as to provide a much-needed boost to local economies across the country though new jobs and strengthening local supply chains. Retrofitting just 20% of Greater Manchester’s 1.2m homes would create £3-5.4bn of economic activity.
In April 2022 the Intergovernmental Panel on Climate Change released its most alarming report to date, stating clearly that climate change is the biggest challenge the world faces, and dramatic action to counter and mitigate its worst impacts is needed at every level, including national and local government.
If the UK is to cut our greenhouse gas emissions quickly and to keep global temperatures within safe limits, then we need to prioritise our single biggest sources of carbon emissions: heat from our buildings.
Construction firms are busy, and many are unwilling to invest in new skills and accreditations without the confidence that demand for retrofit will create a future market. The Government’s October 2021 Heat and Buildings Strategy is ambitious, but lacks the detail to give confidence to contractors and skills providers. The Government’s levelling up white paper, published in February 2022, made scant reference to retrofit, despite the potential to reduce fuel poverty and create jobs in all areas of the UK.
Government funding to retrofit the homes of residents on low incomes is available through the Social Housing Decarbonisation Fund and Sustainable Warmth Fund, but the amount on offer is not enough, particularly given rising labour and material costs. There is little financial support for councils to set up retrofit advice services for residents that are not fuel-poor.
The retrofit of a home is complex, and relies on many trades working together. There is a risk that local government procurement is not clear on who should be taking overall responsibility for each retrofit. Poor quality retrofits can be avoided by using a hands-on retrofit co-ordinator who is independent of the installers delivering the work, but these are in short supply.
There is a growing appetite from residents to make their homes more energy efficient as bills soar. However, many do not have the capital to improve their homes, and there are currently no incentives for retrofit such as stamp duty reductions. Residents lack knowledge on where to start and need trusted advice.
The challenges facing councils are multifaceted. But so too are the benefits they can achieve by tackling them, such as confronting fuel poverty, improving health, and reducing the risk to people from future energy price shocks and energy supply restrictions.
North East Derbyshire District Council has worked with expert partners to install external wall insulation at 324 council-owned homes in ex-mining communities. The council views these social housing properties as ‘hard to treat’ in terms of boosting energy efficiency, and the people living there are at high risk of fuel poverty. The work began in in late 2020 and finished in December 2021, with work on each home taking about five to seven days.
Emissions impact
The scheme is expected to deliver carbon savings of 343 tonnes a year, significantly boosting the authority’s efforts to cut housing emissions to net zero.
Social impact
The council expects residents to save £92,700 – an average of £286 per household – through lower energy bills.
By prioritising hard to heat homes, the council is also protecting people’s health and wellbeing and reducing the burden on local NHS services. Residents have said that their homes are noticeably more comfortable.
Jobs and skills impact
The project has also developed green skills in the area. Sustainable Building Services UK Ltd, the contractor that carried out the work, commissioned Think Construction to conduct on-site training for 10 workers, helping them gain NVQ Level 2 qualifications in external wall insulation. A site manager also gained training in NVQ Management of External Wall Insulation.
Sustainable Building Services also recruited two new local site managers, while the project’s quantitative surveyor has earned a retrofit assessor qualification and will soon begin retrofit co-ordinator training.
Finally, site management teams have undertaken training on The Retrofit Academy’s Level 2 Award in Understanding Domestic Retrofit.
Finance Model
The scheme was split into two. In the first phase the authority carried out work on 115 homes with £2.5 million of its own money, supplemented by £565,000 of LADS 1a funding (a pot created by the Government’s Green Homes Grant Local Authority Delivery Scheme). In the scheme’s second phase, the authority is using £1.04 million of LADS 1b funding, supplemented by £7.2 million of council investment, to work on 209 homes.
What helped this project?
A key enabling factor in this project was the long-term partnership between the council, Rykneld Homes, who are a council-owned social housing provider, and Sustainable Building Services.
Sustainable Building Services are familiar with the different property types owned by Rykneld, and were able to suggest bespoke insulation solutions, and meet tight delivery deadlines. The long-term partnership also provided the confidence to the contractor to undertake employee training in retrofit.
Whole-house retrofit radically boosts energy efficiency but has high initial costs, making it unappealing to many householders and councils. However, the long-term energy and maintenance savings it creates can be used to finance the upfront cost of work.
This is the essence of the Dutch Government initiated Energiesprong approach, now being used in Sutton and elsewhere in the UK, led by Energiesprong UK. Housing Providers (generally local authorities and housing associations) are sharing learning with each other, and ultimately the whole sector, to disrupt the status quo and bring the cost of whole house retrofit down.
The Sutton project, a partnership between London Borough of Sutton, Sutton Housing Partnership, Energiesprong UK and others, is the first in London.
The Energiesprong approach focuses on creating desirable homes that use very little energy. Because an Energiesprong retrofit (or new build) has the very best energy standard available, it uses the money that would normally be paid on energy bills and maintenance to pay for the works.
The Energiesprong approach can do this while ensuring the cost of living does not go up, because the standard guarantees real life performance for both indoor comfort and energy use for up to 30 years.
11 homes have been retrofitted to the Energiesprong performance model in Sutton so far, with a further phase due to commence through Energiesprong’s Innovation Partnership with the GLA and Turner & Townsend.
What is an Energiesprong retrofit?
The Energiesprong approach treats the whole house in one go, dealing with electricity, heat, hot water and ventilation to deliver a home with 90% carbon reduction now (zero carbon as the grid decarbonises). This is achieved with whole new walls and roofs that are manufactured offsite and delivered with doors and windows already fitted. These sections can then be fitted around the existing house, giving a new exterior and bringing its insulation and airtightness up to the required standards.
Emissions savings
Homes will be made zero-carbon in use, a significant energy performance upgrade for some of the homes that currently have low Energy Performance Certificate (EPC) ratings (F or G).
How is the initiative funded?
Sutton Council has secured funding from the Greater London Authority, The Department for Business, Energy and Industrial Strategy (BEIS) and British Gas via the energy company’s obligation programme (ECO3i).
Lessons from the work so far
The pilot project has underlined the need for a strong, joined-up tenant engagement and liaison strategy between landlord and contractor – from pre-contract to post-contract. This is essential to ensuring that tenants understand the scope of work.
In the current marketplace, there have been challenges in procuring offsite manufactured components. Energiesprong UK has identified 10 new suppliers with this capability to prototype, test and evaluate their products and retrofit solutions to increase supply chain capacity and productivity.
Private rented homes are among the least energy efficient in the country. Minimum energy efficiency standards for privately rented homes were introduced in 2018, requiring a minimum EPC rating of E. Local authorities are responsible for enforcing the standards and can fine landlords that fail to comply. The government has proposed that all new tenancies be EPC C by 2025, and all existing tenancies be EPC C by 2028.
Liverpool City Council is using its enforcement powers in the private rented sector to help improve standards.
How is the council taking action?
Using the Government’s EPC register data, along with data from its fuel poverty service Healthy Homes, Liverpool City Council has mapped the energy performance of privately rented homes in the city, with particular attention on those with the lowest rating (F and G). Data mapping identified that Liverpool’s privately rented homes (which account for 32% of the city’s housing stock) include many ageing, poorly insulated properties with bad heating systems. Only one in three privately rented properties have an EPC rating of A to C, and many are below the legal standard of E.
The council is using its data to drive a two stage approach:
Engaging with property owners
The project targeted the worst G rated properties, with a wider awareness campaign around energy efficiency including webinars facilitated by a leading local landlord. Letters were sent to private landlords of 300 properties with poor energy efficiency, alerting them to regulations and prompting them to either upgrade, claim exemption or seek funding.
Following a review of feedback, claims for exemptions or updated EPCs, the city is taking direct enforcement action against more than 50 properties. This ranges from issuing compliance notices to potential fines.
Licensing and enforcement
Liverpool City Council will use its proactive licensing activity to improve the condition of rented properties in parts of the city where home energy efficiency is at its worst. A licensing scheme is a practical way of identifying properties that are not compliant with MEES standards, rather than relying on tenants, who may fear retaliatory eviction, to make complaints.
How is it funded?
Liverpool City Council has received £70,000 of funding from the Department for Business, Energy and Industrial Strategy. There is no additional funding for the licensing scheme, which is intended to be cost-neutral.
Without adequate national policy support, local authority targets for home decarbonisation will be missed. That is why central and local government must collaborate to create enabling environments for rapid and effective retrofit initiatives. The government should:
Whilst these national policy changes are essential, local government can take action now.
Good data is essential to target local authority retrofit programmes. This could include housing stock data and fuel poverty data, but could also information on skills gaps, the local supply chain and course provision by local education providers. Good data will help authorities put together a pipeline for funding applications and to target initiatives for the able-to-pay sector such as Solar Together, or promoting the government’s new Boiler Upgrade Scheme.
Local authorities have some levers over the development of retrofit skills, such as their own procurement. Councils can also play an important convening role, bringing local employers and education providers together.
63% of all homes in England are owner-occupied and retrofit of these homes is essential to reach the government’s decarbonisation targets. There is interest from homeowners – research in Greater Manchester suggests that 30% of home-owners would be willing to undertake retrofit in the next five years. But there is also a lack of information and advice, and a lack of qualified installers.
Surveys show that local government is trusted more than national government by the public and by the private sector, and can play an important role in encouraging home retrofit.
The government has allocated over £6bn for energy efficiency and low carbon heat schemes, through channels including the Sustainable Warmth Fund and the Social Housing Decarbonisation Fund. Bidding is competitive and delivery timescales are short.
Enforcement of MEES regulations is challenging. Regulation of the private rental sector is complex, and engagement with landlords with the worst performing homes can be difficult and time-consuming.
Retrofit can involve big changes to homes, and it is essential to bring residents with you.
The challenge of decarbonising homes can seem overwhelming – but examples of proven, practical innovation show that Government and local authorities can accelerate action in this crucial area.
For councils, partnerships and collaboration with central government, community groups and other local authorities can have a huge impact on local carbon emissions and the lives of residents.
Our towns and cities bulletin helps you deliver high-impact climate action. Discover useful tools and opportunities, whatever your council’s size and budget.
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