Written evidence submitted by Lancaster City Council
This submission is provided by the Conservation Team of Lancaster City Council. We feel it is vital that the contribution of the heritage sector is not overlooked in the Government’s drive for growth and can make a positive contribution in a holistic approach to sustainable development.
The following relates the specific questions raised in the consultation.
The costs of repairing and keeping historic buildings in good repair and altering them so that they meet modern standards (e.g. thermal efficiency) is higher than other buildings. Material costs and the cost of specialist professional staff and craftsmen are higher and, in recent years, has increased sharply, making repairs and improvements less viable. The loss of local government conservation officers adds to the problem, meaning that free or inexpensive local heritage advice, in large parts of the country, is no longer available.
A more favourable VAT regime is urgently required. Historic buildings and areas contribute greatly to a sense of place and character in the built environment and form the heart of most communities. However, there is currently no recognition of the benefits they bring within current funding and taxation regimes. VAT on historic building repairs still applies yet VAT relief is available for new build, meaning there is often little incentive for owners to repair and maintain their historic buildings by making the costs more affordable. Indeed, some owners of historic buildings on regeneration sites have an incentive to let buildings fall into disrepair in the hope that rebuilding free of VAT may be possible. Vacant dwellings have to be empty for two years to qualify for VAT relief, a period during which their condition is likely to decline through lack of maintenance, vandalism or material theft.
On publicly owned land more funding is needed which is ring-fenced through a fair settlement for local government and other public sector bodies. Spending on historic buildings always comes out second best to new facilities, such as a new scanner for a hospital. Local government, and other public sector bodies, used to have the inhouse skills in terms of conservation officers, architects, surveyors and engineers to maintain their historic buildings but these have been lost or denuded over the years through constant cutbacks and austerity. They now have to rely on more expensive procurement through the private sector.
Local communities and businesses need funding to take on historic buildings. It is no good passing buildings in need of repair to such organisations without the necessary resources as this would pass on a significant financial burden that may overwhelm the communities and businesses concerned. The Government could provide organisations like the Architectural Heritage Fund (AHF) and the Heritage Trust Network with more funding so that they can support more groups wanting to establish Building Preservation Trusts (BPTs), for example. Offering VAT exemptions or reduced rates to BPTs for bringing redundant buildings back into use may be an option.
The current funding and finance models for built heritage are not fit to meet the challenges we face. There is currently a woeful lack of funding within the sector to meet the most basic repairs and maintenance, let alone delivering regeneration and conversion of historic buildings to new uses. The funding invariably has to be bid for (e.g. requiring/wasting significant resources in terms of staff time), tends to be stop/start (e.g. funds continually come and go and are rarely sustained over a long period of time to make investment feasible) or comes with onerous restrictions (e.g. restrictions on type of ownership for VAT relief). Multiple funding regimes make the process extremely complex (e.g. a wide range of different funding bodies each with different objectives and rules causing unnecessary complexity). There is lack of funding within local government itself to offer grant aid to incentivise repairs and enhancement schemes. In the past these schemes have delivered many positive benefits to the local community.
The recent HAZ schemes, for example, which involved very small amounts of Government money (just over £1m in Lancaster) came with a highly regulated regime of rules and oversight that was wholly disproportionate given the small grants involved. The funding would be constantly reviewed and clawed back, with rules changes midway through the scheme, and unrealistic deadlines for spending attached, particularly after the Covid pandemic. The bureaucratic nature of the scheme was off-putting for owners of historic buildings and complex for the staff managing them. The HAZ needs to be continued, as the repairs and improvements it delivered are shared widely by people in the local community, but the regime needs to be less onerous and more flexible.
In terms of regeneration, the reliance on private sector funding only works in areas where the market is strong, essentially in London/SE and some of the larger cities. Outside these areas many regeneration schemes involving historic buildings require significant public grant funding to make them viable and to minimise the risk to developers. At the moment, there is a lack of funding, let alone adequate funding, for this important work. Many regeneration sites of historic buildings and areas, which could contribute housing and an improved environment to local communities, lie dormant and decaying waiting for suitable grant-aided investment. The money to incentivise this work will not come from the private sector. It requires public money to unlock this private investment, which could contribute significantly to national growth ambitions while benefiting local communities at the same time.
A major role, as has been evidenced for many years. Research under Heritage Counts underpins reinforces the benefits. https://historicengland.org.uk/research/heritage-counts/heritage-and-society/attachment-historic-places/. Publicly funded heritage-led regeneration schemes all over the country have illustrated this, such as the successful Townscape Heritage Initiatives and High Streets Heritage Action Zones. A well-maintained historic environment contributes greatly to a sense of place and community identity. Conversely, a run-down historic environment has the opposite effect. This effect is amplified, as the historic environment is often focused at the very heart of our communities in city, town and village centres or around features that are so important for a neighbourhood’s historic identity, e.g. wool and cotton mills.
We would emphasise the key role that the re-use of historic buildings can have in reducing carbon emissions and being sustainable. A reduced rate or zero rate of VAT for repairs/adapting existing buildings would see more heritage assets retained, thereby helping to meet emission targets, and it would see more conservation-led regeneration. At the moment, zero-rating of VAT favours the construction of new or reconstructed buildings, which is not sustainable if, at the same time, historic buildings are left vacant and in poor repair.
It needs to be understood that, while historic buildings can be made more energy efficient, this should be done in a way which does not cause harm to their significance/fabric or the way in which they manage heat and moisture. One size does not fit all, and Government-funded home energy grant schemes need to be mindful of this, with the providers aware of the pitfalls, and able to offer suitable alternatives.
Explicit communication is needed about the different approach needed for solid walled buildings, and possible need for LBC, for example in publicity about ECO4 grants. Grant schemes should cover works in compatible materials and bespoke work where necessary. Government grant scheme providers also often will not undertake a site visit without LBC being secured first, and therefore can’t provide necessary information required for LBC application.
A suitable funding regime for this is vital, given the scale of the challenge and potential problems that can arise if retrofitting schemes are poorly designed and implemented. The costs have to be balanced by the benefits of thermal improvements, benefits which are permanent and accrue year by year on an ongoing basis. Making these improvements now rather than causing their delay, means that these benefits can be delivered sooner.
Make grant funding available for further heritage-led regeneration schemes to incentivise the private sector and reduce the risk, making investment more attractive. This needs a fair settlement for local government with long term funding regimes ringfenced from other spending commitments, with more powers for local authorities to acquire sites and manage their re-development. There needs to be a reduction or zero-rate for VAT for repairs and maintenance of historic buildings, VAT reductions for Building Preservation Trusts and others who have taken on the burden of a neglected historic building (not for those who have left them to deteriorate).
Building regulations and associated standards need to be more flexibly applied in terms of the energy efficiency that can realistically be achieved through thermal improvement to historic buildings without causing harm to their fabric or character. EPC ratings are not useful for buildings of solid walled construction as the calculations they are based on are not fit for purpose, often based on estimation, and recommendations often incompatible with historic building fabric. Poor EPC ratings can prevent viable uses of historic buildings.
We require better information and more flexibility in the current consent regime. More flexibility is needed to allow investigation of buildings and for permitting specified minor alteration or improvements, provided they are under supervision of the local conservation officer, without the need for listed building consent. We need better and more independent heritage statements by heritage consultants, free from influence from their developer paymasters. Heritage consultants should be required to meet professional standards and be on a list of approved contractors held by the LPA, with potential to lose this status if they breach these standards.
We need to make it less risky for LPAs to use the enforcement powers available to them: urgent works notices and repairs notices and provide Historic England with more funding to enable them to offer more Acquisition Grants to Underwrite Repairs Notices. Early intervention saves time and money in the longer term and Councils need to be able use these powers in a timely manner.
Fundamentally, there needs to be more long terms heritage-led regeneration and repair schemes to ensure there are projects for a skilled workforce to be employed on. Without this, there is little incentive for the construction sector to invest in training to acquire a suitably trained workforce. Many heritage-led schemes are bid for by a small and narrowing range of contractors, which is poor for competition within the sector and means schemes cannot go ahead for lack of necessary skilled staff or for reasons of viability.
Adequate long-term funding is needed for training in heritage skills. Many training schemes are inadequately funded on a short-term or ad-hoc basis and, therefore, are difficult to sustained in the longer term. Many current scheme providers cannot plan into the future because of withdrawal or delays in public funding and the constantly uncertainty this creates.
In local government there is an essential need for conservation officers to be employed and for their posts to be ringfenced. Where there is a will, a properly resourced team can be provided. For example, here at Lancaster, we have a team 3 FTE conservation officers. However, some LPAs may need to be compelled to provide proper resourcing. Teams of conservation and design officers are needed within the enlarged unitary authorities via the current proposals for devolution. The lone voice of the sole conservation officer should be a thing of the past. Experienced officers should be retained by better pay and not lost to the private sector. Better training is needed to improve the quality and uptake of graduates on post-graduate schemes, with graduate conservation officer posts provided for entry into the sector, similar to the post we provide here at Lancaster.
Investing in skills for retrofit is essential. This vital work cannot be safely done by contractors or builders who lack the necessary skills. This includes more conservation officers within local authorities and skilled specifiers and installers. Investment in these skills is vital to deliver the benefits yet avoid the pitfalls.
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