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The Warm Arm of the Law: Tackling fuel poverty in the private rented sector

The ACE Research team, working in partnership with CAG Consultants, have published the Warm Arm of the Law, an Ebico Trust funded research project looking 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.

The PRS has grown by over 40% in the last ten years and now comprises 20.5% of the housing market in England, compared to just 10% in 1999 [1], with Wales seeing a similar increase [2]. Figures for urban areas are higher. 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 [3], and 36% in Wales [4]. Compared with other tenures, the PRS in England has the largest proportion of energy inefficient F and G rated properties; 45.7% of PRS households living in such properties are in fuel poverty [5].

Research highlights that cold related illness from privately rented properties costs the NHS over £35 million per year [6], while best practice approaches have shown that by improving housing standards, savings to the NHS and to wider society can be delivered.

Increasing the energy efficiency of PRS properties is key to reducing fuel poverty and limiting the impact of cold related illnesses 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.

Kelly Greer, ACE Research Director noted that: “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”.

The research project has 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.

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.

The project involved desk research, interviews with stakeholders and local authority practitioners and the development of a series of case studies. A steering group made up of the Association of Local Energy Officers (ALEO), the Chartered Institute of Environmental Health (CIEH), the Department for Business, Energy & Industrial Strategy (BEIS), Future Climate, the Local Government Association (LGA) and the Residential Landlords Association (RLA) oversaw the project.

 

ACE and CAG Consultant are very grateful to Ebico Trust for their support for this project.

 

 

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

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

[3] 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

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

[5] 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

[6] 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.

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Local Story – Energising Greater Manchester

Greater Manchester is tipped to be a world leader in transforming how we generate and use energy but more investment in energy efficiency and local energy is needed for the full potential to be realised, according to the Energising Greater Manchesterreport released today.

The report is the latest in a series of ‘local stories’ produced by the Association for the Conservation of Energy (ACE) and was written in collaboration with the Association for Decentralised Energy (ADE).

The report showcases local, efficient and low carbon energy projects across the region to highlight how local authorities, businesses, industry and residents are driving the change to meet carbon reduction targets, improve business competitiveness and the residents health and well-being.

The  Greater Manchester Combined Authority (GMCA) Green  Deal  Communities  Little  Bill  Programme, which supported  1,240 fuel poor homes with energy retrofit works and the  bespoke  energy  management  programme  at MediaCity UK which has resulted in annual savings in excess of £850,000, are two of the stories featured.

Greater Manchester Green City Portfolio Leader, Cllr Alex Ganotis said the report reveals the ingenuity of Greater Manchester and its residents and their commitment to making the region carbon neutral.

At our Green Summit in March, we shared our ambition for Greater Manchester to be one of the leading green cities in Europe and carbon neutral by 2040,” he said.

While this may be an ambitious target, this report clearly demonstrates our residents are meeting the challenge head on and in doing so, not only reducing our carbon footprint but boosting the local economy and improving the health and wellbeing of the community.”

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ACE’s response to the Mayor of London’s draft London Environment Strategy

ACE welcomes the vision and principles of the Mayor of London’s draft London Environment Strategy and the ambition for London to be a zero-carbon city by 2050.

We agree that the city’s most pressing environmental challenges are harming Londoners’ health and the city’s economy, and that the current pace of change is too slow. The Mayor highlights that big problems need ambitious responses. Therefore, we would like to see the Mayor’s activity and focus on air quality continue, but also expanded in relation to improving the energy efficiency of buildings, improving the lives and reducing health inequalities of those households that are in fuel poverty, whilst supporting economic growth in the environmental goods and services sector.

Our full response to consultation on this strategy can be found here.

 

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ACE’s response to the Mayor of London’s draft Fuel Poverty Action Plan

ACE welcomes the publication of the Mayor of London’s draft Fuel Poverty Action Plan for London to help support the eradication of fuel poverty across the capital. We agree that fuel poverty remains at unacceptable levels and that it has not received the attention that the issue deserves.

ACE’s response covers four key topics:

  • Supporting the roll-out of borough referral networks.
  • Improving the energy efficiency of London’s homes, with a particular focus on improving standards in the Private Rented Sector.
  • Energy for Londoners.
  • How the Mayor should work with the UK Government.

Our full response can be found here.

 

 

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Our response to BEIS’s consultation on ECO: Help to Heat

The Energy Company Obligation (ECO) is a programme to deliver energy efficiency measures in homes across Great Britain in order to reduce carbon emissions and improve the ability of low income and vulnerable consumers to heat their homes to comfortable levels. ECO was launched in January 2013 and is currently in its second obligation period (ECO2), which is due to end on 31 March 2017. The Government’s Spending Review 2015 announced plans for a supplier obligation to run for 5 years from April 2017 at an estimated level of £640 million per year. This consultation is on the shape of a transitional year from April 2017 to March 2018, paving the way for a subsequent 4-year scheme

While the overall size of the supplier obligation from 2017 is too small, many of the changes proposed appear sensible. However, under the proposals, there will be significant under-delivery to households during the transition year. This is due to the progress made to date under ECO2, the potential for over-delivery and carryover of excess work into the transition year, and the fact that proposed deemed scores are approximately one third lower than the evidence from RdSAP assessments under ECO2. We therefore strongly recommend that the extended CERO target is increased from 3MtCO2 to at least 4.1MtCO2, and the HHCRO target from £1.84bn to at least £2.08bn. This would comfortably keep the transition year’s delivery costs within its notional spending limits, and make sure BEIS and ECO’s stakeholders deliver what is possible with the (too modest) budget limits established by the last Comprehensive Spending Review.

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commercial sector,ESOS,policy design

Non-domestic energy efficiency – policy design principles

Dr Peter Mallaburn is Director of Policy and Governance at the Energy Institute, University College London, and Editor of Climate Policy Journal. He has represented the UK on air pollution, climate modelling and energy policy in the EU, OECD and the IEA and worked on international climate negotiations. Peter helped write the UK’s first Climate Change Programme, set up the Carbon Trust, was Salix Finance’s first CEO, and set up his own consultancy, Policy to Practice, in 2008.

The government is currently reviewing its non-domestic energy efficiency policies as well as its wider policy portfolio as part of the Carbon Plan. DECC’s 2016 Departmental Plan provides some context:

Although the energy intensity of the UK economy has fallen by 24% since 2004, there remains significant untapped potential for energy saving in the business sector. Realising this potential will improve businesses’ productivity and will also support growth. But the business energy tax and policy framework is complex and businesses tell us it does not provide the incentive it could to reduce energy consumption. 

This article contributes to this process by outlining our state of knowledge on energy efficiency and identifies some key policy principles around which a new energy efficiency programme could develop. It is drawn both from the literature and from direct policy experience in the UK and overseas.

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Our response to Public Accounts Committee Inquiry into Household Energy Efficiency Schemes

In 2013, the Department of Energy and Climate Change (DECC) launched two complementary schemes—the Green Deal and Energy Company Obligation (ECO)—to improve the energy efficiency of the UK’s housing stock. ECO obligates energy suppliers to install efficiency measures, such as loft or wall insulation, with the cost passed on to energy bill payers.

Through the Green Deal, homeowners funded installations by taking out loans, which they repaid through their energy bills. The Department of Energy and Climate Change made the decision in July 2015 to not invest further public funds in Green Deal loans.

The National Audit Office (NAO) examined what the schemes have achieved, and at what cost, the design and implementation of the schemes and whether DECC is learning lessons to feed into future energy efficiency schemes. The Public Accounts Committee have followed this up with an inquiry, to which we have provided a concise response.

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data,Energy Company Obligation,Green Deal

DECC’s Household Energy Efficiency Statistics: the good, the bad and the whaa…?

Liz Warren is a founder and director of SE2, a small consultancy helping individuals, communities and organisations build their capacity to respond to climate change. You can find out more about their work at www.se-2.co.uk.

DECC recently published statistics on the take-up of energy efficiency measures by households during 2015.  In this blog post, we unpick some of the data, exploring the good, the bad and the frankly baffling within the rich data set provided. How did policy announcements affect the market? Have whole-house energy assessments unlocked energy efficiency opportunities? And could we have found the elusive answer for improving the private rented sector?

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Our response to HMRC’s consultation on reduced rate of VAT for Energy Saving Materials

ACE has submitted its response to HMRC’s consultation on proposed changes to the reduced rate of VAT for the installation of energy saving materials in compliance with a recent decision by the European Court. In the summer of 2012, ACE took the lead in convening a broad coalition of interested organisations who were concerned about the implications of the Reasoned Opinion sent by the European Commission to the UK Government to the effect that its 5% reduced rate of VAT on energy saving materials went beyond the scope of the 2006 European VAT Directive. Over subsequent years we have led the coalition in:

  • encouraging the UK Government to respond robustly to the Commission in defence of its reduced rate;
  • providing the Government with a detailed report setting out the reasons we believed that the UK’s reduced rate did in fact form part of a social policy;
  • liaising closely with officials both before and after the CJEU judgment, setting out our view that the UK Government should use the vires in both Category 10 and Category 10(a) of Annex III of the VAT Directive to retain as much as possible of the reduced rate.

Notwithstanding a few concerns, we broadly welcome the Government’s proposals.

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