Written Submission from the Northern Housing Consortium 
About us
The Northern Housing Consortium (NHC) is a membership organisation based in the North of England.  We are the ‘Voice of Housing in the North’ working with both local authorities and housing associations to advance the cause of housing.  Our membership covers over 90% of all Northern social housing providers.  The NHC brings its members together to share ideas, and to represent their interests and to ensure they are heard at a regional and national government level.  

Summary of key messages
The NHC welcomes the opportunity to submit written evidence to the EAC Inquiry. 
The Inquiry is timely as we believe this time of crisis provides an unprecedented opportunity to transform housing quality,  aligning with the Government’s ambition to upgrade the energy performance of existing homes and contributing to longer-term ambitions around net zero and levelling-up.
Despite the extraordinarily challenging circumstances due to Covid-19, energy efficiency must continue to be a priority. The climate emergency requires a transformation of the existing housing stock.
In the North 26% of all carbon emissions are from existing homes but this figure hides a wide variation with domestic emissions as high as 40% in some areas with higher numbers of older housing stock.   Over half of existing homes in the North are below ‘C’ but there are a further one and a half million homes without an up-to-date EPC. 
We would estimate, the total number of existing homes in the North which require some improvement to get to the minimum ‘C’ is 4.3 million.
The Chancellor’s summer economic statement gave welcome recognition to green retrofit and its job-creating potential. Net Zero Housing is an NHC priority for Covid-19 recovery in Northern regions, because we know that retrofit across all tenures could create 20,000+ jobs in the North, where our homes are older and colder.
A summary of our key messages is below:

•	Green Recovery - retrofitting of existing housing stock is necessary as part of Covid-19 recovery, and an integral element of levelling up – it is fast, labour-intensive and has a strong economic multiplier.
•	Scaling up Retrofit – shifting gears from small scale single-measure improvements to a holistic, whole house approach will establish transformative retrofit programmes.
•	Funding Pledges - the Chancellor’s ambition for owner occupiers with a £2bn programme of Green Homes Grants is a much-needed impetus for the private sector.  The next step should be to bring forward the promised £3.8bn social housing decarbonisation fund so that councils and housing associations can retrofit homes at scale and speed.
•	Potential of the social housing sector – the sector has aspirations to reach more ambitious targets than the minimum required, as long as the Government, across departments, works with the sector, including the early release of funds. 
•	Powers devolved to regions – there is greater scope for local bodies to take a prominent role in creating a market in home energy efficiency.

1.	Are the Government’s targets on residential energy efficiency still appropriate to achieve its ambition to reach net zero emissions by 2050?

1.1	The targets remain ambitious in the context of the scale of the mission to improve the existing housing stock.  However, the pace of change is not on track for ‘as many homes as possible’ to reach Band C in 15 years.  In the North 70% of existing housing is below Band C and at current rates of conversion, the target will be missed.  That amounts to over 3 million homes with an EPC below Band C.  10% of those are the worst performers in Bands F and G across all tenures which are likely to require more expensive whole-house retrofits.

1.2	The biggest challenge is in the private sector with over two million owner-occupied homes in the North below Band C and in the private rented sector 6% of homes are Bands F and G with the mandatory target already missed. Over half of social housing is Band C and there is potential for the sector to exceed the minimum targets, and this over-aspiration will be necessary to meet the minimum level across tenures. 

1.3	The economic stimulus announced by the Chancellor contained two important announcements on housing retrofit: a £2bn programme of Green Home Grants for privately owned homes and a £50m Social Housing Decarbonisation pilot. It was essential that the retrofitting of existing housing was recognised with funding stimulus but the sector will continue to make the case for further allocations from the Social Housing Decarbonisation Fund in the run-up to the Autumn Budget and Spending Review.

1.4	The economic stimulus was welcome, but we believe that for all parts of the housing market to reach the minimum targets, a national plan to insulate homes and decarbonise heating is urgently needed and will reap benefits.  IPPR estimate that  the annual jobs supported during construction of clean heat networks to meet Clean Growth scenarios would be 60,000 by 2030.  For the social housing sector, this national plan must integrate well with wider asset management requirements for building safety, fire risks, as well as prioritising certain households for support including for those in fuel poverty. The social housing sector must have confidence that its decisions and investment will stand the test of time and that its asset management plans can appropriately prioritise investment. 

1.5	If energy efficiency and heat decarbonisation in the domestic sector is to make an appropriate contribution to the overall net zero ambition, there is a need for both the pace and the scale of activity to at least double in the next 3 years.  The next 18 months are critical to shift from small scale single-measure improvements to a holistic, whole house approach establishing transformative retrofit programmes. 

2.	What are the potential risks and opportunities of bringing forward the Government’s energy efficiency target?

2.1	We note that the Committee for Climate Change has held back from recommending bringing forward the UK’s emissions target, but continues to point out the lack of urgency given the scale and challenge of retrofit.  There should be an aspiration to over-deliver against the existing targets rather than aiming to just about meet them. This would require an aspiration to EPC Band C to 2030 (in line with the UK’s statutory target on fuel poverty) and around a 15% reduction in energy used for heating existing homes by 2030.

2.2	Initial analysis from the Energy Efficiency Infrastructure Group (EEIG) suggests that bringing the target forward by 5 years would increase the associated benefits to the economy, jobs and health. The economic activity, for example involved in getting just to ‘C’ would increase tax revenue by £51.1 billion by 2030 and create demand for an estimated 38,000 FTE jobs in the North.

2.3	A more ambitious target in the social housing sector would require a more ambitious offer from government. Across other tenures, without good regional and national support structures, there is risk to bringing forward targets.  There is a balance between achieving high levels of energy efficiency and the costs to tenants and residents of upgrading homes. Current targets respect this balance.  Accelerating the targets could risk losing confidence in the changes to be made, and the supply chain will not be ready. 

3.	Should Government targets for energy efficiency be legislated for, and if so, what difference would this make? 

3.1	The extent to which government could mandate a particular solution to meet the targets is not a straightforward issue, but clearly there are precedents with regulation being used to introduce smokeless fuels and drive the changeover from town gas to natural gas, as well as to specify condensing boilers and minimum energy efficiency standards in the private rented sector.

3.2	Legislation may drive urgency and build a momentum but, as with the private rented sector, mandated standards can be ignored.  Moving to a statutory framework for energy efficiency would require either an oversight body or a significant increase in local authority capacity and resources.  

3.3	A more workable alternative to develop incentives, move towards minimum standards and engage consumers would be for energy efficiency to be part of national infrastructure strategies. This would embed energy efficiency as a structural long-term benefit and one which requires a public investment framework that lasts beyond typical five or ten-year policy cycles.  

3.4	Such an approach provides scope for regional delivery mechanisms which we believe is necessary in the context of the evidence of the need to target support across tenures and to delineate the able-to-pay market and those needing support.  

3.5	We would propose support for a regional delivery mechanism through: 

a)	Local Authority capacity - local authorities have considerable ambition in relation to energy efficiency. They are making prominent public statements about the advantages of net zero and urgently improving their own services through declarations of climate emergency. They are connecting buildings to heat networks and collaborating with other public services to secure heat network economies of scale. But they may struggle to ‘move up a gear’ with the capacity and resources at the scale necessary to meet targets, never mind exceed them. 
b)	Cross-boundary working - there is scope to explore how Local Industrial Strategies can support the Grand Challenges, including Clean Growth.  Through LEPs and Local Energy Hubs there is great potential in cross-boundary working and monopolising all available funding support for regional and sub-regional areas (including collaboration through the Northern Powerhouse). 
c)	Devolution of energy efficiency - there is variation in the extent that low-carbon policies feature in devolved deals, although most feature some element of low-carbon energy.  We believe powers devolved to the regions provides considerable scope for local bodies to take a prominent role in creating an energy market by using a high energy efficiency standard in mapping, coordinating and leading the conversation with residents.

4.	How effective is the EPC rating at measuring energy efficiency? Are there any alternative methodologies that could be used? 

4.1	EPCs were originally designed to provide a basic indicator of the energy cost of running a home.  Based on this methodology, EPCs are increasingly influencing the retrofit of existing housing - a purpose for which they were not originally intended and for which they may be inadequate, particularly when it comes to older homes.

4.2	We are aware that the methodology can produce perverse ratings and potentially hamper efforts to decarbonise existing housing.  Evidence we have gathered shows concerns over the effectiveness of EPCs on several fronts:
a)	Impact on carbon reduction - high carbon-emitting heaters can achieve better EPC scores because they are cheaper to run, which is clearly contrary to the clean growth ambition. 
b)	Accuracy in older properties - the SAP is based on standard assumptions about household occupancy.  The assumptions made of older houses make them more likely to receive a low score, not necessarily reflecting their actual performance leading to inappropriate options for retrofit of older properties.  
c)	Reliability - In addition to the potential inaccuracy of performance assessment for certain types of property, we were aware of reports of discrepancies in the EPC data between different assessors which would require addressing if EPCs are to continue to be the measure determining retrofit decisions. 
d)	Enforcement - the private rented sector has the highest proportion of any sector of the worst performing (F and G-rated) properties. Local authority enforcement teams have told us that enforcement, using MEES, is challenging and teams lack the capacity to deal with this effectively. 
e)	Data - the transparency and accessibility of EPC data can be a barrier to enforcement of minimum standards. In the North 76% of homes have an EPC and 64% of those are below C.  We can surmise that a similar percentage of properties without an EPC are also below C then at least a further one million properties (in addition to the 3 million with an EPC below C) will require improvement. Government has made improvements to open access EPC data but more is needed, including trigger points, if EPC data is to be the primary tool for measuring targets.

4.3	We note that BEIS published a call for evidence on EPCs in 2018 which explored the possibility of extending the use of EPCs to other trigger points beyond sale, rent or construction as well as wider views on how EPCs could be further improved.  We would urge BEIS to continue with this review and assess the options for a carbon rating to provide a clearer picture on the energy use in homes.

5.	How will lack of progress on residential energy efficiency impact the decarbonisation of heat and the associated costs of this?  

5.1	Progress on energy efficiency will not only contribute to decarbonisation of heat but is also required to make viable new types of electrified heat pumps which require well insulated, draught-proof homes.  Analysis by Imperial College London shows that without all appropriate energy efficiency improvements, the cost of heat decarbonisation could be £6.2 billion higher per year to 2050.  According to NEA, most future scenarios show a potential for efficiency savings of between 20% and 30% in the demand for heating by 2050.  

5.2	Solid wall construction, non-traditional construction and non-standard cavity are the categories that are most difficult to treat for insulation.  In the North, 1 in 4 homes were built before 1919 and are likely to have this type of construction with 38% of those older properties being categorised as non-decent and 11% having a category 1 hazard.  UK-wide there is an estimated 13 million homes not properly insulated with either cavity or solid wall insulation and there are 8 million uninsulated lofts. In the Greater Manchester area, half a million of homes are estimated to need basic insulation.  

5.3	Moving towards 2030, insulating homes with solid walls is a proven energy efficient method to reduce household emissions from heat sources but is not without challenges. Barriers to the increased uptake of solid wall insulation have been identified as: long-term inconsistency of government policy; and general lack of awareness among householders.   The cost for solid wall insulation is high, varying between £8,500 - £12,000, but the energy savings are on average 6,700kWh per year with an individual cost saving of over £200 per year without taking into account potential cost reductions from bulk installations such that social housing providers are able to achieve.  

5.4	Lower costs can be achieved if the measure is taken forward in conjunction with general home renovation works or as part of an area-based scheme. The coordination of external insulation projects at neighbourhood or area level will not only introduce the economies needed to reduce costs, but a neighbourhood approach will improve the visual impact of the appearance of external insulation. Coordinated retrofitting work with other measures to reduce costs as well as improve the appearance of an area supports an approach for energy efficiency to be part of a national infrastructure plan. In addition, this forms part of the economic boost required in local areas.  Friends of the Earth estimate that insulating 1 million homes per year would create more than 100,000 jobs.

6.	How can the Government frame a Covid-19 stimulus strategy around improved energy efficiency of homes?  
6.1	We are pleased that the Committee has addressed the most pressing question of the day. The Chancellor’s summer economic statement marked a significant change in the Government’s attitude towards home energy efficiency. With £2bn for Clean Home Grants the Government has recognised the job-creation potential of green retrofit. The £50m allocation for Social Housing Decarbonisation Fund (SHDF) is expected to support up to 1,400 jobs and could retrofit around 2,500 homes in the social sector. 

6.2	The SHDF promised in the Conservative Manifesto amounted to £3.8bn over 10 years. The National Infrastructure Commission estimated that this level of funding over a 10-year programme could meet the ambition of ensuring social rented properties reach at least EPC Band C by 2030.   The summer economic statement indicated that £50m is an initial allocation. With greater investment to follow, this could signal a turning point in how we manage our older, colder housing stock.

6.3	The period in the run-up to COP26 will be crucial with the Government seeking to demonstrate a robust approach to the housing stock as one of the UKs biggest emitters.  The pathway to the targets could either set housing on the road towards net-zero emissions – or lock housing into its existing fossil fuel system.

6.4	Retrofitting existing homes is fast, labour intensive, provides a strong economic multiplier, and can contribute to levelling-up the economy. We back the Northern Metro Mayors who called for widespread retrofitting of properties across the North West, as the region looks to create a springboard for change.  

a)	Existing housing is ‘Shovel-Ready’

When implemented through existing programs, energy efficiency retrofits are the most obvious option for a ‘shovel-ready’, local green investment.
Home retrofits are rooted in local supply chains and support local growth.  The Energy Efficiency Infrastructure Group (EEIG) modelling to 2030 suggests that improving all homes in the North to EPC C by 2030 would require a total of 38,100 FTE jobs.  Previous research for the NHC has shown that three quarters of expenditure by housing organisations in the North is with suppliers based within the North, supporting local jobs and supply chains. 
In the North, 64% of houses are EPC Bands D-G, which means that over 3 million homes are below the minimum standard and in need of some improvement work.  To reach ‘C’ in the North by 2035, 200,000 homes per year would need to be upgraded. 10% of those 3m homes are the worst performers at Band F or G and are likely to require whole-house retrofit and not merely the ‘one-measure’ approach provided through ECO (the Government’s primary means of upgrading poor domestic energy performance). 
b)	Clean energy infrastructure is labour intensive
Energy efficiency actions can support economic stimulus programmes by supporting existing workforces and creating new jobs, in this labour-intensive work.  Analysis suggests that when homes are upgraded to higher efficiency standards, more than half of the total investment typically goes directly to labour.
Improving the North’s homes even at a steady rate could create 20,000 additional jobs at pace providing a direct and positive impact on local supply chains and putting money back into people’s pockets through energy bill savings, and reduced pressure on the NHS.
In the wider energy efficient workforce, National Grid estimates that the energy sector will need to fill over 400,000 jobs to build the Net Zero energy workforce over the next 30 years.  Nearly 100,000 job opportunities will be in the North – the North East and Yorkshire and Humber will need to recruit for almost 40,000 more jobs to support decarbonised industries - area targeted areas for levelling-up.  
c)	Strong Economic Multiplier
Stimulus policies targeting existing buildings can have the greatest macro-economic impacts. This is because renovations of existing homes have strong potential for boosting supply chains.
Modelling by Verco Cambridge showed that for every £1 invested by the Government in domestic energy efficiency, GDP could be increased by £3.20.  These savings are estimated at £270 per household per year, or £1.79bn per year across the North if all homes were brought up to EPC C.
The University of Oxford’s Smith School have identified building efficiency retrofits as one of five policies with high potential both on economic multiplier and climate impact metrics. The Cost Benefit Ratio (Value for Money) indicator for a programme of housing retrofit is estimated at 2.27:1 which classifies the programme as “high” value for money.
In the long run, public investment in home retrofit offers high returns by driving down costs. Harnessing more of these opportunities now when the labour market desperately needs re-booting could kick start the green innovation which the Government is working towards.
7.	What additional policy interventions are needed for social housing, leaseholders, landlords and tenants? 
Social Housing
7.1	In the North, the social housing sector represents nearly 19% of the housing stock, higher than the national average. The sector has an existing supply chain supporting a rolling programme of repair and refurbishment.  We concur with BEIS that the social housing sector should be a key priority and represents considerable potential from which to build a green retrofit market.

7.2	Works undertaken to meet the Decent Homes Standard have led to an average of £10,000 per home being invested in basic repair, weatherproofing and installation of modern kitchens and bathrooms and approximately 1.4 million homes in total benefitting from some kind of intervention.

7.3	The English Housing Survey identifies social housing having an average SAP rating of 68, higher than private sector stock and owner occupied which have an average SAP rating of 62.  Most homes (56%) are in Bands A to C, compared with 33% of the private rented sector and 29% of owner-occupied dwellings. This provides opportunity for the social housing sector to exceed targets, but this can only be done with support for the sector. 

7.4	The BEIS Select Committee commented in 2019 that although the Government ‘wants the social housing sector to be a “flag bearer” for energy efficiency standards, it has so far failed to set out a delivery mechanism.’  The sector has taken responsibility to be at the forefront, but the question of how to deliver the required number of retrofitted properties at scale remains a challenge. There is drive and leadership from the social housing sector, but this must be recognised and supported by measures in the form of public policies and coherent, robust financial and regulatory support. 

7.5	Our feedback from social housing providers confirms barriers to large-scale retrofitting of the existing housing stock include:  
a)	balancing the degree of improvement needed with the ability to fund the works
b)	reconciling emission reduction with the type of property and an older housing stock
c)	a need for increased internal capacity
d)	under-developed retrofit supply chains
e)	applying new and emerging technologies with minimal disruption to occupied homes
f)	ensuring that affordable warmth is available to residents without compromising affordable rents 
g)	low level of interest from residents in achieving emission cuts
h)	confidence in investing in sustainable retrofit technology

7.6	These are not insurmountable barriers but as the CCC stated in their most recent progress report to Parliament, there is a requirement to “publish concrete policies to deliver the Government's ambition on retrofit (EPC band C by 2035) - including …a delivery mechanism for the social housing minimum standards.”

7.7	We know that the process, choice and cost of transitioning to a low carbon domestic heat source is likely to be higher for early adopters of which there have been many in the social housing sector.  The best choice and least-cost technologies to remove emissions from heating is not yet known. There is value in exploring several options to 2030 and aiming for a balanced mix of technologies. The Government’s Buildings Mission is currently running a scheme aiming to halve the cost of retrofitting existing buildings to a similar standard as new build by 2030.  This must form part of urgent guidance to the sector if investment being made is to represent value for money. 

7.8	The social housing sector is at a critical stage.   Many providers are at the point of having to shift to more expensive, difficult improvements such as insulating solid walls and installing floor insulation. These upgrades tend to be more complex, and often more expensive than the ‘low hanging fruit’ that has already been completed.  These harder to treat homes are now the majority.  In addition to the commitments required by the Clean Growth Strategy, the Grenfell Tower fire and the subsequent review of Building Regulations, fire safety and compliance have had a major impact on social housing providers.  

7.9	We are fully supportive of a plan that takes us to the point where deep retrofit is demonstrably economically viable, starting with the social housing sector.  Our evidence shows that the sector is eager for direction, clarity, and stimulus. Action is needed on: an intensive programme of fabric-first improvements delivered on a neighbourhood basis; and the SHDF to be released to be used to bridge the additional costs of switching to low-carbon heat sources (like heat pumps) rather than replacing gas boilers like-for-like. Using the SHDF in this way would enable reliable supply chains to be built from the demand generated, lowering the cost of the components in the longer run for all tenures.

7.10	The Social Housing Sector in the North is well placed to lead the way on decarbonising homes – and further than that, a recent consultation with our membership showed that 89% of the housing associations taking part indicated that they would be prepared to explore acting as a delivery agent for upgrades to private rented and owner-occupied homes in their neighbourhoods.

Private Rented Sector

7.11	The private rented sector has some of the worst performing homes. This is despite having mandatory standards.  In the North, 67% of the private rented sector is below ‘C’ with 63,000 private rented sector homes in the worst Bands of F and G.
7.12	The NHC has supported the APGG for Housing in the North in the last year to conduct a review of standards in the North’s private rented sector.  The Inquiry found that enforcement of the Minimum Energy Standards (MEES) was challenging for local authorities who do not have access to accurate data that is necessary for efficient enforcement.  Local authorities were mostly relying on HHSRS to assess the risks for cold homes, but this is a largely reactive process unless the local authority has established a designated licensing area.  One of the key recommendations of the APPG Inquiry is that home energy performance should be included in a national registration database to identify landlords, and poorly performing properties.  

7.13	Regulation should be used to drive private investment in poor quality private rented properties, and this includes tightening regulation to an EPC D by 2025 and Band C by 2030. This needs to be accompanied by more robust enforcement which requires investment in local government capacity.  While landlords should be investing in their own properties, our evidence showed there is also a need to work with landlords to supplement and support their investment to make sure that energy efficiency works are carried out to improve the living conditions for the tenant.  This is important as 35% of people in fuel poverty live in the private rented sector.  

8	What are the challenges for rural areas? 

8.1	The areas with the highest proportion of F and G rated properties are largely rural areas.  Each region of the North has rural areas with high percentages of F and G properties - in the North West - South Lakeland (20%), in the North East - Northumberland (15%) and in Yorkshire and Humber - Ryedale (25%).

8.2	Rural homes which are off the gas grid use forms of heating fuelled by LPG or heating oil that is more expensive than gas. In rural areas, around 27% of heating comes from non-gas and non-electric forms, compared to around 5% in cities. 

8.3	The proportion of rural homes that are stone-built with solid floors and walls is much higher than in urban areas.  Solid walls are less efficient than cavity walls and are more expensive to insulate meaning that rural communities are more likely to be passed over by suppliers who are looking to meet their obligations in the most cost-effective way possible.  

8.4	The Energy Company Obligation (ECO) rural sub-obligation requires suppliers to achieve at least 15% of their total Home Heating Cost Reduction Obligation (HHCRO) by promoting qualifying measures to domestic premises in a rural area. Between April 2017 and February 2018, there were 16,748 installations in rural properties despite the fact that rural homes accounted for around 20% of fuel-poor properties in 2015 (around one million households).

8.5	Emissions from homes that are situated off the gas-grid have been highlighted by BEIS as an immediate area of priority for decarbonisation.  We believe more could be done to ensure that rural communities get their fair share of ECO, potentially to differentiate between ECO delivery to rural off-gas grid, rural on-gas grid and urban off-gas grid households if ECO is to effectively meet its policy intent. 

8.6	As the ECO funding does not currently provide for the extent and depth of improvements needed in homes to meet local areas we believe the next phase of ECO could be transformed from a supplier-led scheme to a local area-based scheme, supported by appropriate delivery arrangements. This would deliver a local approach to the scheme and may require the supplementing of ECO with grant funding. 

9	Is the £5 million Green Home Finance Innovation Fund enough to stimulate the market for and drive action from the banks to encourage owner occupiers to improve the energy efficiency of their homes?

9.1	The Government’s announcement of a £5 million Green Home Finance Innovation Fund, through its 2019 Green Finance Strategy, available to the private sector to pilot products such as green mortgages signals a welcome drive to such initiatives.  However, whether this level of funding will have the scaled effect that is required will remain to be seen.  We note, the fund was labelled as “woefully inadequate” by the BEIS committee.

9.2	These financial products can only be regarded as one part of the solution and should not be seen as a substitute for a large-scale green retrofit infrastructure programme.

10	How should the proposed Home Upgrade Grant Scheme be delivered to help the fuel poor?

10.1	Investment through the proposed of £2.5 billion Homes Upgrade Grants could usefully focus on subsidising ‘whole-house’ retrofits for low income households. It could be optimised if this investment were coordinated with interventions like the Towns Fund and proposed Shared Prosperity Fund (SPF) and a new phase of ECO which is area-based and locally led. Blended funding, led by local authorities as coordinators in local areas, would allow for wider improvements in housing quality, and bring a new focus to raising the standards of the existing stock.

11	Should the new grant scheme supplement ECO in its current form, or should ECO be redesigned? 

11.1	An energy supplier obligation – like ECO – is one way of investment in energy improvements but we do not believe a supplier obligation should be the dominant part of the future funding.  ECO has not proven to be a fully effective tool to ensure that fuel poor homes are upgraded to EPC Band C by 2030 or more generally to support vulnerable households. For example, the private rented sector has the highest number of households in fuel poverty but also historically the lowest level of support from ECO.   

11.2	If the Government is to deliver on its ambition of upgrading as many fuel-poor homes ‘as is reasonably practicable’ by 2030, then a new approach is needed beyond the current scheme. 

11.3	We believe that a new approach should see ECO transformed from a supplier-led scheme to a local authority-led, area-based scheme.  An area-based approach would be more effective as local authorities would be able to upgrade all households together.  This would avoid a piecemeal delivery of solid wall insulation, which is likely to be more expensive and disruptive. Identifying specific areas that should receive energy efficiency upgrades can be achieved through local government and its networks as an efficient way of identifying the ‘worst-first’, such as in rural areas, and achieving value for money.  

11.4	An updated ‘worst first’ principle could allow energy efficiency schemes like ECO to take a more of a whole house retrofit approach with multiple improvements in one go. This would allow all work to be done in one extended visit – doing more with less contact in line with social distancing measures. 

11.5	Developing ECO so that the next phase is locally-led and blended with a level of grant funding would support a local authority-led approach. The scheme could be optimised if this investment were coordinated with other funding interventions such as HUGs as referred to in Q10.

12	Are there examples of where energy efficiency policy has fallen between Government Departments? How could cross-departmental coordination be improved? 

12.1	Energy efficiency and heat decarbonisation are cross-cutting issues.  Energy efficiency policy may have stalled in part because there has not been a coherent cross-departmental approach.  Having a dedicated Government infrastructure programme and making energy efficiency a national infrastructure investment priority (as the NIC has recommended) could help address this. 

12.2	The forthcoming Comprehensive Spending Review across government departments could provide the opportunity to improve this cross-cutting policy. 

12.3	The social rented sector, and the delivery of energy efficiency in its homes is subject to competing demands with MHCLG and Homes England driving supply numbers, BEIS delivering energy efficiency targets and MHCLG overseeing a revised building safety regime. 

12.4	In the next few months, the sector will be required to respond to an Energy White Paper and National Infrastructure Strategy, a Heat and Buildings Strategy and a new Fuel Poverty Strategy and the Social Housing Decarbonisation Fund. While separately MHCLG are delivering the Social Housing White Paper, and HM Treasury are conducting a Net Zero review.  

12.5	Collectively, these measures determine the Government’s role and investment in energy efficiency in a way that can ensure overall value for money and decarbonisation goals can be met.  But funding submissions by different departments with differing objectives will not achieve a consensus on the extent to which they drive energy efficiency in the Spending Review process.

12.6	To improve the Spending Review outcomes for energy efficiency policy we would recommend to the Inquiry that recommendations to Government take a cross-cutting approach.

July 2020