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Warm Arm of the Law

Kelly Greer, Research Director at ACE reflects on the publication of a new report from ACE and CAG consultants, which looks at the extent to which the Housing Health and Safety Rating System (HHSRS) and Minimum Energy Efficiency Standards (MEES) are being proactively implemented and enforced by local authorities across England and Wales[1].

In 2008, while working at Impetus Consulting, the Energy Efficiency Partnership for Homes commissioned Emma Jones and I to research and write a report on HHSRS[2].  As the report details, although HHSRS had given local authorities the power to enforce minimum housing standards related to Excess Cold, the powers were not being used nearly as widely or effectively as they could be.  The opportunity to tackle fuel poverty and reduce carbon emissions at very little cost to the tax payer was not being realised, and there remained great potential for more proactive use of HHSRS.  And here my passion for tackling fuel poverty in the PRS was born…

My joint working with Emma on this topic continued during my time at National Energy Action (NEA) when we published ‘HHSRS: Your power to warm homes in the private rented sector’[3]. Again, we highlighted that HHSRS had the potential – and we showcased some great local action where councils were leading the way – but HHSRS was still not being used nearly as widely or effectively as it could be.

Fast forward to 2018.  HHSRS has been joined by MEES,  and ACE and CAG Consultants (where Emma is now a Partner) have just published ‘The Warm Arm of the Law: Tackling fuel poverty in the private rented sector’, one of two outputs from an Ebico Trust funded research project looking at the extent to which HHSRS and MEES are being proactively implemented and enforced by local authorities across England and Wales.

Unsurprisingly, the headline finding is that local authorities are not doing enough to enforce minimum energy efficiency standards in the PRS. But, quite frankly, who can blame them. In the wake of budget cuts, local authorities have reduced spending on enforcement activity by a fifth between 2009/10 and 2015/16 and key stakeholders expect this trend to continue as further planned cuts in public expenditure start to bite[4].  Those we interviewed as part of the project frequently referenced ongoing budget cuts and a lack of resources within local authorities, together with growing responsibilities as HMO licensing expands and MEES are introduced.  And at the same time, the number of people living in privately rented homes is ever increasing.

The PRS has grown by over 40% in the last ten years and now makes up 20.5% of the housing market in England, compared to just 10% in 1999[5]. And there has been a similar increase in Wales[6]. Figures for urban areas are higher and it is widely accepted that this tenure will continue to expand.

Fuel poverty continues to be a major problem and is particularly acute in the PRS, with an estimated 21.3% of PRS households thought to be in fuel poverty in England[7], and 36% in Wales[8]. Compared with other tenures, the PRS in England has the largest proportion of energy inefficient F and G rated properties and a staggering 45.7% of PRS households living in such properties are in fuel poverty[9].

Research from the Building Research Establishment highlights that cold related illness amongst people living in privately rented properties costs the NHS over £35 million per year[10] – a figure I would say is conservative.  Increasing the energy efficiency of PRS properties is therefore key to reducing fuel poverty and limiting the impact on the NHS. However, achieving this in the PRS has been historically challenging; there is little incentive for landlords to invest in the energy efficiency of their properties given that it is their tenants who will benefit from reduced energy bills. It has long been recognised that minimum standards are key to achieving improvements in this sector.

Parliamentarians often argue against further regulations in the PRS. They state that local authorities have extensive powers to tackle issues. They’re perhaps partially right. Local authorities have a ‘toolbox’ of legislative powers that can be used, but the problem is that these powers are not being used as effectively as they could be. In addition, there are strengths and weaknesses to these legislative powers.

We found mixed views from stakeholders about how useful HHSRS is in terms of improving energy efficiency and reducing fuel poverty in the PRS. Many stakeholders reported that Excess Cold is the most common hazard that comes up in their HHSRS inspection activities. Some considered that HHSRS is a useful and versatile tool, good at dealing with major problems and which, in extreme circumstances where there is imminent risk, can be used to prohibit the use of all or part of a dwelling. There are also no financial contribution limits to HHSRS as the principle objective of HHSRS is to mitigate risk and maximise safety of tenants. Councils also have the power to undertake the works by default and charge the landlord for the improvements. However, stakeholders also considered that HHSRS has many weaknesses. They felt that the guidance is ambiguous around the Excess Cold hazard; in particular, the issue of ‘affordability’ needs to be much more clearly defined. Numerous stakeholders referred to the fact that the statistical evidence relating to energy performance and health outcomes has not been updated since HHSRS was developed, and it was felt that HHSRS is disproportionately weighted towards immediate safety rather than any impact on longer term health effects.

Will the introduction of MEES help to encourage further action? While some stakeholders considered the introduction of the MEES regulations as a positive step, recognising that the legislation is a world first in terms of introducing minimum standards, we heard mixed views about whether MEES is likely to be effective without amendment and the resources for more robust enforcement.

The key strength of MEES was felt to be its simplicity and the potential for enforcement to be less resource intensive (compared to HHSRS). Reference in the guidance to affordability for tenants was also felt to be a positive.  The future trajectory of the regulations – with PRS properties required to be a minimum EPC band C by 2030 – was considered another major strength as this long-term target should help to promote whole house retrofit approaches beyond EPC band E, thus eradicating fuel poverty from the property for the vast majority of tenants. Unsurprisingly many stakeholders were unsure how effective the regulations will be as they were only just beginning to be implemented. In addition, the regulations in their current form are likely to have limited impact due primarily to the plethora of exemptions for landlords. Stakeholders were frustrated with the lack of ambition in the most recent government consultation[11] and considered that wider housing policy failures should not result in the weakening of energy performance.

There were also questions raised as to whether the regulations would be effectively implemented when so few rental properties comply with the requirement to have an EPC – a Freedom of Information (FOI) request in 2013 found that just over a quarter of PRS properties had an EPC[12]. Ultimately, the poor enforcement of EPC regulations will diminish the effectiveness of MEES.

Stakeholders felt that there was a lack of clarity on how MEES and HHSRS could work together. There is growing evidence that local authorities accept that F and G rated properties are sub-standard and, while recognising that there is not an exact parallel between Excess Cold hazards and F and G rated properties, that action should be taken on inefficient properties. Some councils noted that they will look at taking HHSRS enforcement activity against properties that have registered a ‘no cost’ exemption under MEES. It will be interesting to see how the MEES regulations are implemented and whether HHSRS and MEES are used in combination.

So what can be done to help reduce fuel poverty in the PRS? Our research project identified a number of recommendations around improving the implementation and enforcement of HHSRS and MEES, for government (national, regional and local), landlords and their representatives, tenant advice services and the energy efficiency sector. Priority recommendations included:

  • National government needs to ensure that local government is adequately resourced to proactively implement both MEES and HHSRS and could offer guidance and advice on how these services can be implemented as cost effectively as possible.
  • Local government needs to develop a joined-up approach to implementing HHSRS and MEES. National government could assist by issuing guidance and examples of how best to do this.
  • National government should work with the energy efficiency sector to build the evidence base around the potential benefits to landlords of having highly efficient properties, including reduced rent arrears, reduced void periods and increased rental and asset value.
  • National Government should continue to restate the long-term trajectory of the MEES regulations to help landlords understand their long-term requirements and to support the delivery of whole house retrofit approaches, thus minimising disruption for tenants and avoiding multiple interventions by landlords.

There is great potential for both HHSRS and MEES to be effectively implemented and doing so will not only improve the lives of tenants living in some of the worst properties in the country, it will also offer significant economic and wider societal benefits to the UK, including reducing the burden on the NHS, improved productivity and a reduction in carbon emissions.

Notes

The outputs from the research project  include a policy report and a toolkit. The policy report, aimed at policy makers, industry and wider stakeholders, highlights the opportunities to increase energy efficiency and reduce fuel poverty in the PRS, detailing current practice, where there are barriers and what is needed to overcome these, while the toolkit provides practical advice for local authorities on how to ensure they are realising the full potential of the energy efficiency legislation already in place.

[1] With thanks to the Ebico Trust, who funded the research to produce the report and accompanying toolkit.

[2] Energy Efficiency Partnership for Homes (EEPH), Impetus Consulting Ltd, 2008, Tackling fuel poverty using the Housing Health and Safety Rating System (HHSRS): http://eepb.org.uk/KB/Fuel_Poverty/HHSRS_taskgroup/2008_(April)_EEPH_HHSRS_Report_-_Final.pdf

[3] National Energy Action (NEA), Impetus Consulting Ltd and Blooming Green, 2011, HHSRS: Your power to warm homes in the private rented sector National Energy Action (NEA), Impetus Consulting Ltd and Blooming Green, 2011, HHSRS: Your power to warm homes in the private rented sector.

Toolkit: www.eagacharitabletrust.org/app/uploads/2016/03/HHSRStoolkit2014update.pdf

Policy report: www.eagacharitabletrust.org/app/uploads/2016/03/hhsrspolicyreportaug2011.pdf

[4] Written evidence submitted by the Chartered Institute of Housing [PRS 031]: http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/housing-communities-and-local-government-committee/private-rented-sector/written/74252.html

[5] English Housing Survey 2016-17, Headline Report: www.gov.uk/government/statistics/english-housing-survey-2016-to-2017-headline-report

[6] Shelter Cymru, Fit to Rent: https://sheltercymru.org.uk/wp-content/uploads/2015/02/Fit-to-rent-Todays-Private-Rented-Sector-in-Wales.pdf

[7] Fuel poverty figures for 2015, published by BEIS June 2017, Low income/high cost definition: www.gov.uk/government/uploads/system/uploads/attachment_data/file/623108/Fuel_Poverty_Statistics_Report_2017.pdf

[8] Living in Wales Survey, 2008: http://gov.wales/docs/statistics/2009/091130livingwales2008en.pdf

[9] English Housing Survey 2015-16, Private Rented Sector Report: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/627686/Private_rented_sector_report_2015-16.pdf

[10] BRE, 2011 : www.cieh.org/media/1380/the-health-costs-of-cold-dwellings.pdf. Please note that this study is based on BRE’s HHSRS cost calculator, which has since been updated. BRE also undertook additional analysis using their Category 1 calculator, which put the cost of ill health to the NHS between £37 million and £674 million depending on actual SAP ratings and occupancy levels.

[11] Domestic Private Rented Sector minimum level of energy efficiency consultation, December 2017: www.gov.uk/government/consultations/domestic-private-rented-sector-minimum-level-of-energy-efficiency

[12] In a recent answer to a Parliamentary Question, MHCLG stated that they have no information on the level of compliance of EPCs in the PRS. www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2018-07-02/159568/

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