The Climate Change Committee have released their assessment of the Heat and Buildings Strategy

The Government’s independent advisor on tackling climate change has recently published their assessment of the Department of Business, Energy and Industrial Strategy’s (BEIS) Heat and Buildings Strategy, which was launched in October last year.

The Heat and Buildings Strategy set out Government’s approach to decarbonising buildings, a major part of meeting the net zero by 2050 target. The Strategy confirmed £800m for the Social Housing Decarbonisation Fund, £950m for Home Upgrade Grants, £450m for the Boiler Upgrade Scheme and £338m for Heat Network Transformation Programme over a three-year period, amongst other funding and policy commitments. You can read more about the Strategy in our earlier blog here.

The Climate Change Committee’s (CCC) independent assessment comes at a time of rocketing energy bills for households and a time where energy security is high up on the Government’s agenda due to Russia’s invasion of Ukraine. ONS data released this month shows inflation has surged to 9%, with around three-quarters of this rise due to soaring energy bills. The Institute for Fiscal Studies (IFS) suggest that the level of inflation being experienced by low-income households is actually closer to 11% at the moment due to a higher proportion of their total income going towards gas and electricity bills.

Beyond the immediate support required through the benefits system to ease the impact of rising costs for households now, insulating our homes and transitioning away from exposure to volatile global gas pricing has never been more urgent.

The CCC report details the scale of the challenge, outlining that 77% of the UK’s domestic heating demand is being met by natural gas, with around 7% being met by electricity, the same for oil and bioenergy, and the rest by solid fuel. The report also reiterates that the UK’s relative domestic energy use is higher than all other nations across Europe due to having the oldest, leakiest housing stock that has not been suitably insulated.

In the North, we know there are higher concentrations of older homes and so the challenge is even more acute in these communities, represented through higher than average levels of fuel poverty across the North. Though the challenge remains vast, the CCC’s report advocates the benefits available through reducing emissions from our homes, namely, potential savings on energy bills, improving comfort and creating healthier spaces to live in. The CCC implore the pace of improvements to the fabric of existing homes and the move to low-carbon heating, committed to in the Heat and Buildings Strategy, to be ramped up quickly and continue over the next 10-15 years.

The CCC are clear that improving the energy efficiency of homes and widespread electrification of heat should be central to the response to increase the UK’s protection against high wholesale gas prices and meet net zero. Overall, the Heat and Buildings Strategy is identified as “an important (and long sought) step forward that offers a foundation for making progress in the sector”.

But the CCC assessment shows there are still significant gaps in plans. They recommend Government brings forward the consultations pledged in the Strategy, including the consultation on rebalancing levies between gas and electricity. This is particularly important for NHC members as reform in this area would make electrified heat cheaper and therefore increase the viability and appeal to tenants and residents of moving to low-carbon heat. Affordability is key to this and the NHC will be following developments on the consultation closely to ensure low-income households are able to reap the benefits of housing decarbonisation.

Other consultations the CCC call to be responded to include the BEIS consultation to set Minimum Energy Efficiency Standards (MEES) in the private rented sector, something the NHC has been calling for. They also identify driving improvements in the owner-occupied sector as a key policy gap to be addressed, as this is where the majority of poor energy performing homes are. These three consultations are all defined as “critical decisions” across tenures which Government now need to act upon.

The CCC welcome the Heat and Buildings Strategy’s commitment to developing the heat pump supply chain, and its focus on heat pumps (and heat networks where appropriate) as the priority option for home heating. Key to the CCC’s advice is ramping up the pace, scale and coordination to address the skills challenge associated with the roll-out of heat pump technology to upskill, retrain and attract new entrants to these new green jobs. The Northern Powerhomes report shows the huge opportunity for the North with potential for 77,000 retrofitting and low-carbon heating jobs in the region.

They also welcome that the Strategy recognises local action as key to housing decarbonisation with local authorities well-placed to develop area-based plans. The CCC highlight that local authorities will need the resources and capabilities to be able to do this, which the Strategy does not consider. This is particularly important for the North as the Northern Housing Monitor showed that over the last decade, local authority housing and planning capacity fell by 58% and 73% respectively. The CCC recommend Government review current and expected gaps in resources and provide additional funding and new centralised pools of talent that authorities can draw on to be able to deliver.

Public engagement was presented as critical to retrofit in the Strategy, and the CCC urge Government to launch a comprehensive public engagement strategy to ensure people know how the transition will impact them. NHC members are already doing some brilliant work with tenants on this, and the Social Housing Tenants’ Climate Jury’s final report includes some helpful recommendations about how providers can work with tenants on retrofit and wider climate action.

The CCC report also discusses the importance of retrofit plans taking into consideration homes’ resilience to future changes to the climate, such as expected warmer and wetter weather. CCC outlines there has been positive development on climate adaptation for new homes, such as to mitigate overheating and flooding, but there now needs to be policy focus on existing homes to ensure climate adaptation is central to energy efficiency programmes.

The NHC agrees with CCC’s assessment that the current cost-of-living and energy security crises mean the policy framework detailed in the Heat and Buildings Strategy must now be progressed at pace and scale and we hope Government heed their advice. It was disappointing that the Energy Security Strategy missed the opportunity to accelerate plans to reduce energy demand by making homes warmer and greener. The NHC will follow the Energy Security Bill, announced in the Queen’s Speech, as it goes through Parliament to keep members updated.

You can see the full Independent Assessment of the Heat and Buildings Strategy here.

Please do not hesitate to follow up on this with the NHC by contacting Anna Seddon (Policy and Public Affairs Manager) at anna.seddon@northern-consortium.org.uk.