Fighting fuel poverty – how to leverage frameworks as part of the Local Authority Delivery scheme

Guest blog by Gary Cawley, Director, North & Central England, CPC

The Government has come in for a lot of stick for the delivery of the Green Homes Grant voucher scheme for private homes. But, it’s widely acknowledged that the public sector arm of the initiative – the Local Authority Delivery scheme – has been a success since it was launched in the summer last year.

That’s surely down to the hard work, expertise and determination of social housing directors and their teams across the country, to drive down fuel poverty and to meet the net zero aim. Some will probably even beat the Government’s 2050 deadline at this rate too.

Local authorities have to be commended for their enthusiasm for the initiative – the Department for Business, Energy, and Industrial Strategy (BEIS) awarded 57 bids a total of £76million after the first phase of funding. A second round of applications has recently been completed, with expected delivery of projects before 30 September. Winning bids in the process of being announced.

What’s more, the next phase of the scheme is now live with a further £300million being made available to local authorities through Local Energy Hubs, for projects to be delivered by the end of 2021.

Targeted at low-income, low-EPC homes (D and under), the money is enabling local authorities (or consortia of local authorities) to reduce household heating bills and increase energy efficiency/reduce reliance on high-carbon heating systems.

For example, the money is being used for cavity and external wall insulation and solar PV in homes in Oldham. While residents in places such as Leicester, Staffordshire and Yorkshire can apply directly for grants for work up to a value of £10,000 (or £5,000 for landlords).

The Local Authority Delivery scheme is a very welcome and much-needed initiative. I don’t need to tell you that we must get to grips with how the country is going to tackle the retrofit elephant in the room if we’re to meet our net zero targets, and make all homes ready for the decarbonisation of the energy grid. About 75% of existing housing stock needs to be retrofitted and it won’t be cheap or easy. A recent report estimated the total cost of retrofitting social housing to be more than £100billion, with the mean cost of decarbonising a home thought to be just over £20,000.

However, what we need more than anything else is a long-term strategy and commitment from Government. We’re still not sure what’s coming down the line beyond the end of this calendar year, and it was disappointing not to hear anything about the Green Homes Grant or funding for large-scale retrofit schemes as part of Rishi Sunak’s recent budget. Longer-term Government commitments would help provide confidence to the sector, and allow it to build capacity – if done right, NHC estimates the creation of 77,000 new jobs in the North by the 2030s (click here to read the NHC report).

Local authorities and registered providers absolutely should be at the heart of any such plans for the drive towards net zero. We hope the proposed ideas for a ‘home upgrade grant’ and heat and buildings strategy will provide more certainty for the future.

Elsewhere, there are encouraging signs in terms of private funding, with products such as Sustainability Linked Loans, and interest discounts connected to ESG KPIs, starting to emerge.

Following the hardships of the pandemic, it’s also vital that we meet the needs of our disadvantaged communities and provide safe, comfortable, warm homes for people to live in. I still find it hard to comprehend why, according to the latest Government data, over 10% of households in England – 2.4million homes – are still classed as fuel poor.

To that end, we’re also looking forward to seeing the learning outputs from the Social Housing Decarbonisation Fund demonstrator project, a £50million programme to develop innovative solutions as to how retrofitting of social housing stock can be done at scale. The work will inform the delivery of the Social Housing Decarbonisation Fund, which was promised a £3.8billion investment as part of the Conservative manifesto; the first £60million is set to be made available later this year, with subsequent investments coming in “three-year waves”, depending on the next Spending Review.

 

Why frameworks are perfectly placed to help with delivery

 A risk facing those taking part in the Local Authority Delivery Scheme is capacity. With delivery dates so tight, is there any latent capacity available within the sector?

 On top of this, the Government’s strict application criteria for money from the Local Authority Delivery scheme may create some challenges, including:

• A tight turnaround for programmes of work to be completed. Successful applicants for the second tranche of funding will have until 30 September to complete works, and those receiving money from Local Energy Hubs will have until the end of the calendar year.
• Quality is of the utmost importance, and the Government has specifically said that applications which include use of TrustMark-registered contractors will score higher.
• Installers of energy efficient measures covered by PAS 2030:2017 must be certified to install in accordance with the standard – but PAS 2035:2019 certification is preferred.
• A huge squeeze on delivery margins, with only 15% of funding available for administrative and ancillary costs.

With these criteria in mind, it’s clear to me that frameworks are a council’s best bet when it comes to compliant procurement and delivery, and reassurance that the capacity is available to do the work at all.

Using a framework to appoint contractors for works of any size or amount can reduce time and money spent during the process, leading to quicker turnaround on projects, while ensuring the quality and track record of the suppliers you choose to engage with.

As suppliers are evaluated on both quality and price, clients can also be assured that they are getting value for money from the contractors they partner with, and will be able to select those that have the capacity to deliver in the given timeframes.

 

Direct Award

 Depending on their make-up, frameworks like ours may offer either Direct Award, Mini Competitions, or both, for councils seeking to appoint suppliers.

In terms of the short periods allotted under the Local Authority Delivery scheme, the Direct Award process can help clients to shave off chunks of time before project commencement, that would otherwise be spent running a competitive process, also helping to reduce overall cost.

As all suppliers listed under frameworks are pre-approved, clients are also assured of the quality of work they will receive.

This route is increasingly popular with CPC clients.

 

The N8 Framework

 CPC’s Energy Efficiency Measures and Associated Works (N8) framework provides suppliers of measures in line with those eligible under the Local Authority Delivery scheme, including insulation, solar PV and heat pumps, for minor to major works of any value.

It offers a Direct Award option, and is free to use for members of NHC.

The range of suppliers listed under the framework also includes TrustMark-registered companies, meaning the obligations under the Local Authority Delivery scheme agreements can be met.

Any local authorities seeking suppliers as part of the scheme can click here to download our procurement guide to find out more.

And while you’re dealing with the retrofit of your existing stock, you will still also be thinking about ways to ensure your new-build homes will be compliant to the Future Homes Standard.

Modern Methods of Construction (MMC) can help with issues such as thermal bridging and airtightness. Our NH2 Offsite Construction of New Homes Framework provides a range of solutions for whatever the development need. Click here to download the procurement guide.