Industry alliance launches aspirational action plan for Government to make our buildings great again
With the Clean Growth Plan on the cusp of publication and with one-third of UK carbon emissions still coming from buildings, a major industry alliance¹, the Energy Efficiency Infrastructure group (EEIG) with MIMA has called for an ambitious new buildings infrastructure programme to help to decarbonise the UK’s buildings, deliver major energy savings to consumers whilst also providing a much-needed boost to the UK economy.
Commissioned by the EEIG, the Frontier Economics report, “Affordable Warmth, Clean Growth”, recommends a comprehensive Buildings Energy Infrastructure Programme and dedicated delivery agency to achieve major energy savings and de-carbonise the UK heating supply. The report clearly sets out an action plan for the Government to make all homes energy efficient within 20 years. Achieving this goal will require the adoption of world-leading quality standards for retrofitting and constructing homes, area-based schemes led by local authorities, additional funding sources that won’t raise energy bills and financial incentives to encourage households to take up energy-saving measures.
There are still 19 million homes in the UK with needlessly poor levels of energy performance - below an EPC C rating – and up to a quarter of the energy consumed in homes could be saved cost-effectively, with the technical potential for energy use in homes to be cut in half. Despite this, the level of funding for energy efficiency measures has been cut by a huge 50% since 2012 and the number of major insulation and efficient heating measures being installed has crashed by 80%. The EEIG alliance is calling on the Government to reverse that fall and to make buildings’ energy performance a capital infrastructure investment priority.
To achieve this much-needed reverse the report makes key recommendations which include:
- A target for all homes to be brought up to an energy performance rating of C (on the A to G scale) by 2035, with all low-income households achieving a C rating by 2030.
- A requirement for new homes to be constructed to a zero-carbon standard by 2020.
- Subsidies for all low-income home-owners to make energy efficiency renovations to their properties.
- A demonstrator programme to test the most attractive schemes to unlock able-to-pay households’ investment in energy saving renovations, including zero interest loans, low interest equity loans you don’t have to pay back until a home is sold and salary sacrifice schemes like those for childcare vouchers.
- Changes to Stamp Duty to encourage renovations when people move home.
- Tax allowances for private landlords and 50% subsidies for social landlords to undertake energy efficiency renovations.
- Strengthening regulation in the private rented sector from 2025 to prevent landlords from renting out homes which have below average energy performance.
- Applying sensible minimum standards when homes are sold to help address health risks and deaths caused by excessive cold.
The regulations and minimum standards, properly enforced, can significantly bring down the cost of the programme to the public purse.
The Rt. Hon. Lord Deben, author of the report’s Foreword and supporter said: "This is market failure at its most pernicious and the Government needs to intervene to make the free market work. This is a properly constructed infrastructure programme that provides a cost-effective way of meeting our climate change objectives while significantly reducing the cost of living for a huge proportion of the population".
Sir Gus O’Donnell, Chairman of Frontier Economics said: “In a world where it is difficult to guarantee getting a return above inflation on any investment, it makes sense to invest in improving the energy efficiency of your home. This cuts bills, allowing you to stay warm and help tackle climate change. Government needs to do more to encourage this investment and this report provides some practical proposals on how they can do it.”
The Plan would require public investment in household energy efficiency to be increased by £1.1 billion per year – from £0.6 billion today to £1.7 billion. A previous Frontier Economics report that analysed Government data found that an energy efficiency programme achieves comparable economic returns to other infrastructure programmes.
The Government plans to spend £170 billion on housing, economic infrastructure and R&D programmes up until 2021/22. However, buildings energy performance does not yet feature in the Government’s infrastructure plans despite the fact that it would help households to save on average £270 every year off their energy bills, boost the economy and reduce the need for new energy supply infrastructure investment elsewhere. The Building Energy Infrastructure Programme is designed to leverage in £3.9 billion of private investment per year.
A Parliamentary launch will take place on 16th October – an event sponsored by one of our supporters, Conservative MP Antoinette Sandbach along with a tri-All Party Parliamentary Grouping of PRASEG, Intelligent Energy and Fuel Poverty and further supported by Lord Deben. Parliamentarians will be introduced with a complete, long-term and high quality energy efficiency plan as well as opportunities to publically show their support at the event.
Our message to the Government is to support this achievable commitment to keeping energy costs in British homes and buildings down and deliver a high quality, sustainable programme. A programme that can restore business and consumer confidence and unleash private investment in the industry - ensuring long-term improvements in buildings energy performance.
Now let’s see Government work with us to make this happen and ensure that the benefits of raising the building energy performance of our buildings are grasped – from the lasting reductions in fuel bills and fuel poverty to meeting carbon reduction targets and economic growth. This Programme will surely make our buildings great again and make us proud, resulting in an industry prepared and future-fit and with a solid basis of consumer confidence going forward.
The report can be found here: https://www.theeeig.co.uk/news