15 July 2020: Retrofitting the Social Rented Sector: Why a pilot just won’t fly

Last week, Chancellor Rishi Sunak’s message from the dispatch box was clear: the UK’s economic recovery will be delivered through a ‘green recovery’ - ensuring that the UK plays its part in tackling climate change whilst delivering economic growth.

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Making the UK’s housing stock energy and fuel efficient needs to be at the heart of our efforts to reduce our carbon emissions, and ensure we hit our net zero by 2050 target. The Committee on Climate Change (CCC) estimates that homes need to reduce emissions by approximately 83% by 2050. That is no small feat.

To help meet these targets, the Government has set an ambition that all homes meet a minimum of EPC band C standard by 2035. But as of today, only 56% of social housing stock meets that standard. And without further support and accelerated intervention, the UK’s current rate of installation means that we’re on track to miss the 2035 deadline by some 60 years.

So while the Government’s acknowledgement that this is an issue is welcome, the Chancellor’s social housing retrofit pilot misses the mark and will do little to drive forward a national retrofitting program, at the pace or scale we need.

Our report with IPPR, “All hands to the pump: a home improvement plan for England”, released today, shows that it will cost £36billion in the social rented sector alone over the next ten years to combine heat pumps with high energy efficiency standards that are needed to radically reduce carbon consumption in our homes.

The Government’s £50million pilot, announced last week, seeks to kick start this national retrofitting programme for social housing tenants. But this clearly needs to be the start of the conversation – given the scale of the challenge. The £50million will only stretch to cover the very worst performing social housing stock, benefiting only a fraction of the UK’s social housing tenants. For the vast majority who will miss out, it means continuing to put up with an inefficient home and high energy bills - or at its worst, a stark choice between paying for heating bills or putting meals on the table. Time is running out, and the sector and Government must act fast.

For the private sector, the £2billion committed by Sunak to support homeowners misses a huge opportunity to transform the carbon footprint of the UK’s private housing stock. David Cameron’s Green Deal energy efficiency scheme, which ran from 2013 to 2015, saw only 0.05% of targeted properties improve the energy efficiency of their own home. Even with the right ambition, relying on the will of homeowners will do little to jumpstart a retrofitting revolution.

The retrofitting revolution must start in the social housing sector – and not end there. As the IPPR report shows, our sector is ready to jump start the revolution – and we already outperform other tenures and sectors, with the right governance arrangements in place, and the ambition to support the Government to deliver. By failing to invest in a national programme, the Chancellor has missed an unprecedented opportunity to deliver both the UK’s net zero commitments, and simultaneously create jobs and invest in livelihoods.

The UK’s unemployment figures skyrocketed in March 2020, and every month since. The nation is now on track to have the highest rise in unemployment numbers since the Great Depression.

But investing in a national retrofitting programme, driven by the social housing sector - a “Home Improvement Plan” - has the potential to create up to 275,000 jobs in England by 2035, and 325,000 jobs in the UK.

We know that the responsibility for delivering net zero and retrofitting our homes doesn’t just lie with Government. Stonewater must do more too - and where we can, we will. We have already committed to reach EPC band C in all of our homes by 2030, but in line with the report’s recommendations, our assets team are now reviewing the number of homes that need investment to reach EPC band B, and understanding what needs to be done to get there.

But we cannot achieve net zero without Government backing.

Working together, we can make our homes more efficient, and deliver the retrofitting programme our country needs. Making the UK net zero, tackling fuel poverty, and helping people back into work can all be achieved together – but time is running out.