Sense and Sustainability (or joined-up Government part 2)

Abbotsford Road, Oldham – Some of the 8 million houses in Britain that have fallen below decency standards


Anyone who has even glanced at my book Integrated Sustainable Design of Buildings will be aware that I am passionate about the power of collaboration. I am firmly of the belief that most challenges can be more effectively met by a holistic approach that involves people from many different disciplines actually talking to each other.

Unfortunately a lot of people feel threatened by those outside their own discipline. They build walls of jargon and take comfort from the camaraderie amongst their peers that comes from a continuous state of conflict with ‘the opposition’. This enables them to blame anyone but themselves when things go wrong.

Of course we see this in the construction industry between architects and engineers, builders and sub-contractors; and in Government with the internecine strife between Departments and of course between opposing politicians.

In this posting I would like to focus on one particular issue where this lack of joined-up thinking could have a major impact on our futures. There are 26 million homes in the UK in some need of improvement. According to a BRE Information Paper from February 2010: ‘The real cost of poor housing’ (IP 16/10) some 4.8 million homes in England alone came within the Government's definition of ‘poor housing’ in the 2006 English Housing Condition Survey. BRE_paper

This rates hazards arising from deficiencies in housing under the Housing Health & Safety Rating System (HHSRS). The potential hazards range from excess cold, damp and mould, falling on stairs through to asbestos exposure. A similar number of homes in Britain come within the definition of fuel poverty, which, with the recent announcement by Scottish Power of a 19% increase in gas tariffs and 10% increase in electricity tariffs from 1 August, is set to increase significantly.

BRE estimates that the total ‘cost to society of poor housing’, that is housing that has a Category 1 hazard under the HHSRS (see list below) is around £1.5 billion per annum in England alone, including at least £600m cost to the NHS.

Cost to Society:

Loss of asset value
Poor physical and mental health
Social isolation
Higher home fuel bills
Higher insurance premiums
Uninsured content losses
Underachievement at school
Loss of future earnings
Personal insecurity
More accidents
Poor hygiene
Cost of moving
Adopting self-harming habits

Unfortunately Lady Thatcher’s notorious statement that ‘there is no such thing as society’ does apply when one is attempting to come up with one coherent body that will foot the bill for these costs. ‘Society’ neither has a bank account nor a cost centre. BRE estimates that some £17.6bn is required to bring the 4.8m houses in England up to standard, representing a simple payback period of some 12 years. The problem is that multiple agencies would benefit from the resultant cost savings; for example the NHS, police, local authorities, education authorities and of course the occupants themselves, where they pay their own utility bills, home insurance etc.

The Decent Homes Programme, introduced by the previous administration, aimed to refurbish all social sector homes to a minimum standard between 2000 and 2010. By 2008 the percentage of council housing that had reached the decency standard was 69%. This compared with 49% of private rented and 65% of owner-occupied, although housing association social housing had reached 77%. The most common reason for non-decency is the presence of at least one Category 1 hazard under HHSRS. Housing_report

The Coalition allocated £3.7bn in the Spending Review for Decent Homes funding, £1.6bn of which has been awarded to 46 Councils to refurbish 150,000 homes, the remainder being allocated to 28 large scale voluntary Housing Associations that manage Local Authority social housing.

In parallel with the Decent Homes Programme the New Deal for Communities scheme, run by the DCLG Neighbourhood Renewal Unit, was launched in 1998 and provided funding for improving 39 deprived neighbourhoods in England. One of the early projects in Newcastle upon Tyne’s West End has resulted in an impressive 21% fall in recorded crime between 2000 and 2010. Funding for Round 2 of this scheme comes to an end this year.

However the social sector constitutes only 18% of the total housing stock in England, with the owner-occupied sector taking the lion’s share at 70% and private-rented at 12%. These last two sectors are obviously difficult for public sector initiatives to reach, although under the Housing Act 2004 Local Authorities are expected to keep all housing under review, with initially a target for 70% of private housing with ‘financially vulnerable’ occupants to achieve the decency standard (approximately 5% of all homes in England).

Since the Coalition has come to power this target has been removed and specific funding for Private Sector Renewal is no longer available. With Local Authorities now being squeezed financially it seems unlikely that there will be funds available to divert to the private sector.
However in another part of the woods there are currently grants available through DECC and the Warm Front scheme for those on income-related benefits and who live in homes that are poorly insulated and/or that have inadequate heating. This will be replaced by the Energy Company Obligation in the autumn of 2012, whilst the Green Deal will provide loans to individual households for energy efficiency measures that meet the so-called ‘Golden Rule’ – i.e. that the annual saving in energy bill is equal to or greater than the annual repayment cost within a specified pay-back period or the lifetime of the product.

The Energy Saving Trust (EST) reported earlier this month that some 22.7% of homes in England fall within the two lowest energy efficiency bands (F & G) as reported under the Energy Performance Certificate (EPC) methodology. EST_report

This represents around 5m homes, which the EST has estimated would cost an average of £3,000 to bring each home up to an E rating, resulting in a reduction of 5 million tonnes of CO2 per annum , or just less than half a Drax power station.

A recent amendment to the Energy Bill will require landlords to improve the energy efficiency of private rented homes that fall within these bands before 2018 or be forced to remove them from the market. This represents some 680,000 homes, most of which are also likely to fall below the CIEH decency standard.

It seems likely from the above that at this moment in time between 30 and 35% of households in Britain cannot be considered as decent by currently accepted standards. The collateral damage from this is not only socio-economic but runs into billions of pounds per year, much of which is a burden on the taxpayer. Although there has been a steady improvement in social housing, the private sector has been more difficult to reach, but even the limited funding that was made available through the Private Sector Renewal fund has been withdrawn. From 2012 householders will be able to take out long term loans to pay for energy efficiency improvements, but for those homes that remain below the decency threshold this will be like applying green wash to a mouldy wall.

The Department of Health also has funding available for ‘projects to prevent hospital admissions’ and support to Local Authorities and Primary Care Trusts to support social care. Perhaps DCLG, DECC and DH should pool their resources to tackle the outstanding decent homes problem.

Joined-up Government and Carbon Reduction

A solar farm in Germany - will we see the like in Britain?


OK, I can understand that incentives for carbon reduction should be focused on householders. After all there are some 26 million existing houses in Britain that need attention over the next forty years. However there is only so much that can be achieved by improving fabric insulation and installing solar panels. For a start the take-up of the Green Deal is far from certain, whilst many houses will be hard to improve, particularly those with solid walls or inaccessible loft spaces for example.

Despite extensive condemnation and compelling evidence from numerous parties who contributed to the consultation process, the Government is going ahead with their unscheduled modifications to the Feed-in Tariff for photovoltaics. 57% of 466 respondents disagreed with the change, whilst 81% of 442 disagreed with the new bands. The Government’s reason for ignoring this can be summarised by the following quote from its response: ‘the need for fiscal responsibility across all areas of Government spending is a key objective of the Coalition Government.’ FITS

This will effectively close the door on larger installations. The schemes that will be impacted include community installations and solar farms that could have contributed significantly to decarbonising the grid: an essential component of the Government’s legal mandate to an 80% reduction in carbon emissions by 2050.

Contrarily it now seems likely that there will be two opportunities for householders to benefit from Government funding for renewables. As well as the current FIT of 43.3p/kWh for electricity generated from small PV installations for example, along with 3.1p for each unit exported to the grid, householders should be able to obtain loans via the Green Deal. “the Energy Bill (2011) makes clear that the Green Deal may cover measures which generate energy as well as those termed “energy efficiency” measures. If a measure is capable of paying for itself because occupiers use less energy as result of the installation – then it can potentially qualify.” Greendeal

However the Treasury has proposed that subsidy through Enhanced Capital Allowances (ECA) be removed from renewable technologies. In their consultation, which closes 31 August 2011, they assert that ‘expenditure could not qualify for an ECA where it is incurred on plant or machinery that could qualify for a tariff payment under either of the FITs or RHI (Renewable Heat Incentive) schemes.’ ECA

The Government is about to commence a further review of Feed-in Tariffs and Renewable Obligations due for completion by the end of this year. With this in mind DECC have commissioned a report from Arup, which was published earlier this month. Renewables

It is interesting to note that this report anticipates a growth in PV in line with historical trajectories for PV installations in Germany. With precisely zero solar farms commissioned in the UK to date and the likelihood of new ones in the future seriously diminished this does seem unlikely. The burden is likely to fall primarily on the offshore windfarm sector to meet the Climate Change Committee (CCC) Renewable Energy Review target of reducing carbon emissions through electricity generation from the current 500 gCO2/kWh to 50 mg by 2030.
CCC

This is recognised in Table 1.1 of this important report, which lists PV under the heading of ‘Technologies that could play a major role in the future UK mix, with limited role for UK deployment in developing the option’ (my underlining). In other words the CCC considers that electricity from solar farms is likely to be imported from overseas suppliers in the longer term, provided the replacement regime for ROCs covers imported renewable electricity.

The critical role of Government in this complex situation is to ensure that the balance is correct between cost effective investment in decarbonising the grid and improving the efficiency of both new and existing homes, whilst ensuring subsidy and loans reach the parts they are intended for.

The Cambridge Programme for Sustainability Leadership (CPSL) has included my book Integrated Sustainable Design of Buildings as one of their 'Top 40 Sustainability Books of 2010'.

The list builds on their previous research which was published by Greenleaf in 2009 as The Top 50 Sustainability Books. The updated list appeared in their recent report A Journey of a Thousand Miles: The State of Sustainability Leadership, 2011, which highlights some of the most interesting practice and research in the sustainability field.

CPSL is a department of the University of Cambridge focused on working with business and government to build leaders’ capacity to meet the needs of society and address critical global challenges. They run a number of executive education programmes and also convene groups of business leaders to engage in the public policy process, for example through The Prince of Wales’s Corporate Leaders Group on Climate Change.

My book is the only one in the list that includes 'building' in its title, the others primarily cover economics, politics, business, CSR, climate change and philosophy. Authors that feature in the list include such luminaries as Al Gore, Prince Charles, Lord Stern, Sara Parkin, Fred Pearce, Bjorn Lomborg and Mike Berners-Lee. A copy of the CPSL report can be downloaded from http://www.cpsl.cam.ac.uk/Resources/State-of-Sustainability-Leadership.aspx