Draft Fuel Poverty Action Plan for London

Transcription

1 CAN Mezzanine, East Road, London, N1 6AH Draft Fuel Poverty Action Plan for London Consultation response from the Association for the Conservation of Energy This response is from the Association for the Conservation of Energy (ACE). ACE represents the energy efficiency sector in the UK. It works to enable the UK to become energy efficient, driving productivity and business competitiveness, providing warm and healthy homes, delivering a secure energy future and a vibrant low carbon economy. Working with its members and like-minded organisations, ACE delivers compelling research, policy thought leadership and effective campaigning in Westminster and devolved national and local administrations. The views in this response are those of the ACE staff team. They have been informed by the expertise and experience of the organisations that support our work 1, but they do not necessarily represent the views of those organisations. Please note that ACE worked in partnership with CAG Consultants, SE2 and CSE on the evidence base 2 for this draft action plan. 1 Introduction ACE welcomes the publication of the Mayor s draft Fuel Poverty Action Plan for London to help support the eradication of fuel poverty across the capital. We agree that fuel poverty remains at unacceptable levels and that it has not received the attention that the issue deserves. The draft Environment Strategy highlights that London s most pressing environmental challenges are harming Londoners health and the city s economy, and that the current pace of change is too slow. The Mayor highlights that big problems need ambitious responses. In our consultation response to the draft Environment Strategy, ACE commended the Mayor s activity and focus on improving air quality. This should continue, but also be replicated in relation to improving the energy efficiency of buildings, 1 A list of our members and organisations that have supported our recent work can be found here: 2 Fuel poverty in London: Research and Policy Report, CAG, ACE, SE2 and CSE, Association for the Conservation of Energy Consultation response 1

2 improving the lives and reducing health inequalities of those households that are in fuel poverty. It is appalling in today s society that there were between 1,300 and 4,000 deaths across London between 2011 and 2016 where the inability to heat homes adequately may have been a contributory factor. We also welcome the Mayor s commitment to establish a high-profile cross-sectoral Fuel Poverty Partnership to co-ordinate activity across capital. ACE is keen to work collaboratively with the Mayor, the GLA and the Partnership going forward in implementing the Fuel Poverty Action Plan. ACE s response to the draft Fuel Poverty Action Plan for London is broken into four key sections: Supporting the roll-out of borough referral networks. Improving the energy efficiency of London s homes. Energy for Londoners. Working with the UK Government. 2 Supporting the roll-out of borough referral networks ACE welcomes the Mayor s focus on boosting the incomes of people in fuel poverty by supporting benefits uptake campaigns and referral programmes that provide direct advice and support to the fuel poor. We are particularly pleased to see that up to 500,000 will be allocated over the next four years to support the creation or roll out of local advice and referral networks, including home visiting services, and builds on the exemplary activities of schemes such as SHINE and Kingston Warm Homes. However, we note that, with more than 335,000 London households in need of help, this equates to only 1.49 per household clearly not enough on its own to deliver advice and support. The Mayor will have to work with London s councils to ensure that this money levers in further funding. We agree with the Mayor that referral and outreach services must be backed up by the enforcement of regulations to ensure that fuel poor households do not have to live in inadequate accommodation, however this should not be focussed solely on fuel poor households. No household should have to live in substandard accommodation. 3 Improving the energy efficiency of London s homes In our response the Mayor s draft Environment strategy, ACE welcomed that energy efficiency is promoted as the first and best fuel, and we are pleased that this is reflected in the draft Fuel Poverty Action Plan for London. ACE s London Local Story 3 highlights the benefits of improving the energy efficiency of London homes in addition to the core benefit of tackling fuel poverty. More energy efficient homes are not only healthier and more affordable to keep warm, they are easier to maintain, their appearance may be enhanced and their value increased. Money that is not spent on energy bills is more likely to be retained in the local economy, and energy efficiency improvements themselves generate additional employment 3 ACE, Energy Efficiency in London, How energy efficiency benefits residents and businesses in London: Association for the Conservation of Energy Consultation response 2

3 We are therefore pleased to see that 10million will be allocated over the next four years to increase energy efficiency to tackle fuel poverty and reduce emissions, and also to see the Mayor s plan to design and roll out a focussed, world class homes energy efficiency programme as part of Energy for Londoners. Understandably there is further detail to come on how this money will be spent, and how the energy efficiency programme will operate, and ACE is keen to work with the GLA to maximise the opportunities that the scheme can deliver. However, as with the funding for the development and rollout of referral and advice services, this 10million will not in itself be sufficient to solve the problem. We urge the Mayor to work with local authorities and energy suppliers to ensure that London gets its fair share of ECO investment, and with the health service: this service will save money as people with warmer homes are healthier, and so health service funds could contribute towards energy efficiency investments. (See section 3.4.1, below, for more on this). 3.1 Minimum standards vs. whole house approach ACE supports minimum energy efficiency standards in homes across all tenures as part of the long term solution to fuel poverty, and we commend the Mayor on focusing on the most inefficient properties first. Initial targets should be developed to tackle these properties, while the trajectory of future standards should also be published. This will enable supply chain to develop for the increased standards, and encourage property owners to take early action, going beyond the standards in force at the time to meet future standards that they know will be relevant for them in the future. While it is essential to eradicate fuel poverty as quickly as possible, we believe that the key to the successful implementation of improving the energy efficiency of all buildings across London will be in setting achievable milestones. ACE would recommend that when setting the trajectory for milestones, the level of ambition should gradually be increased over time. This will enable planned growth in the supply chain and hence help to ensure that both sustained, quality employment for local tradespeople and quality installations are successfully delivered as a result of the Mayor s activities. However, minimum standards will not eradicate fuel poverty, and we agree with the Mayor to focus on a whole house approach to ensure that all energy efficiency needs of properties are met. As noted in the draft action plan, current and previous energy efficiency schemes have only offered basic and single measures. While such actions are likely to have reduced the fuel poverty gap of that particular household, it is unlikely that they have eradicated the problem of fuel poverty, and therefore there need to be a change in national policy to prevent this piecemeal approach. We should be avoiding multiple retrofit refurbishment projects on the same property wherever possible. The Mayor may wish to set criteria for the use of GLA money in this area that require a more comprehensive whole house style approach to be taken, whilst recognising that it may not be appropriate to spend excessive amounts of money on any one dwelling. In addition to eradicating fuel poverty, this step change in delivery can support the expansion of the capital s low carbon and environmental goods services sector and the Mayor s aim for London to be a zero-carbon city by Private Rented Sector While action to improve the energy efficiency of all housing tenures is required, we welcome the Mayor s strong focus on tackling fuel poverty in the Private Rented Sector (PRS) and the creation of the London Boroughs Private Rented Sector Partnership. London has the highest proportion of private Association for the Conservation of Energy Consultation response 3

4 renters in the UK at 28% 4, fuel poverty is particularly prevalent in this tenure 5 and there is growing evidence that identifies increasing costs to the NHS as a result of poor standards in this tenure 6. As noted above, we agree with the Mayor that referral and outreach services must be backed up by the enforcement of regulations to ensure that fuel poor households do not have to live in inadequate accommodation. However, this activity should not be focussed on fuel poor households only no-one should have to live in substandard accommodation. The ACE team has a long history in working on improving the energy efficiency of the private rented sector. ACE delivers secretariat services for the PRS coalition, a large group of organisations working across the PRS, and we would like to invite the GLA to participate in the group going forwards. Research by Kelly Greer, Research Director at ACE, between 2008 and found that the Housing Health and Safety Rating System (HHSRS) gives local authorities the power to enforce minimum housing standards related to Excess Cold, thus tackling fuel poverty and also potentially reducing carbon emissions. However, this research found that HHSRS was not being used nearly as widely or effectively as it could be and, therefore, there is great potential for HHSRS to be used more proactively to reduce fuel poverty. The introduction of mandatory Minimum Energy Efficiency Standards (MEES) in the private rented sector in 2018 will give local authorities further powers to tackle poor energy efficiency standards. ACE has published a detailed account 8 of how we feel that MEES is a missed opportunity due to loopholes within the regulations, and we are concerned that action to eradicate fuel poverty and improve the energy efficiency of properties may not be taken as a result. In particular, we would actively encourage the Mayor to lobby the UK government to introduce a cost cap for landlords as part of the forthcoming consultation on MEES regulations. It is essential that the current minimum standards are effectively implemented so that this activity can be replicated as the energy performance standards are increased over time, and so the energy efficiency market can expand and move into other housing tenures to fuel poverty proof as many homes as possible Proactive implementation of standards ACE believes that the key to delivering improvements in this sector will be ensuring that London Boroughs are well resourced to work with landlords and tenants to ensure minimum standards through 4 ACE, 2016, Local Story - Energy Efficiency in London: How energy efficiency benefits residents and businesses in London: 5 As highlighted in the draft action plan, 36% of all fuel poor households are living in the PRS, and the PRS has the highest fuel poverty gap of As highlighted in the draft action plan, it is estimated that 82,000 privately rented properties in London are associated with excess cold, with the cost to the NHS as a result of not improving them being 18.9m per year. The action plan also highlights that each local Health and Wellbeing Board spends around 27,000 per day treating the illnesses associated with cold homes due to cold-related hospital admissions and repeat GP visits, mostly from respiratory and cardiovascular conditions. 7 Impetus Consulting Ltd (Kelly Greer and Emma Jones), 2008, Tackling fuel poverty using the Housing Health and Safety Rating System (HHSRS). Final report: National Energy Action (NEA) (Kelly Greer), Impetus Consulting Ltd (Emma Jones) and Blooming Green, 2011, HHSRS: Your power to warm homes in the private rented sector. Policy report: and toolkit: Association for the Conservation of Energy Consultation response 4

5 the HHSRS and MEES are being met, and if they are not then the boroughs should be able to enforce standards. While London Boroughs should respond to any complaints from tenants and referral agencies (reactive), they should be proactively reviewing properties in their areas as specified in the Housing Act Unfortunately, there is still limited awareness of HHSRS outside of Environmental Health departments, limited awareness of the forthcoming MEES within local authorities, and limited resources to deliver on both legislative requirements. Practitioners are also unsure how they should implement MEES, including how to strategically target properties 9 (see response relating to data in section below). Given the resource constraints already facing local authorities and a lack of awareness of standards, it seems unlikely that the minimum standards related to either HHSRS or MEES will be widely enforced across London, by any other than the most proactive local authorities. Previous research found that local authorities differ in their approach to charging for HHSRS enforcement activity, and that this could be a key factor in determining how proactive a local authority can be. BEIS have indicated that the introduction of MEES is likely to trigger burden funding for councils, however this has yet to be defined. In addition, councils are only beginning to implement civil penalties introduced as part of the Housing and Planning Act While all London Boroughs should work collaboratively with landlords in the first instance to meet these standards, if enforcement action becomes necessary then landlords should be charged, and any charges and fines should be ring fenced within Trading Standards and Environmental Health departments to ensure that further proactive activity is well resourced. ACE, in partnership with CAG Consultants, is working on a project the Warm Arm of the Law - looking at how MEES and HHSRS can be proactively and strategically implemented and enforced to support the eradication of fuel poverty. We have already had initial discussions with the GLA s Private Rented Sector Programme Manager, and would welcome involvement from the GLA Environment team to ensure that the project s findings can be useful to London. ACE welcomes the introduction of the GLA s database of landlords and lettings agents who have been convicted of criminal offences. ACE would recommend that the Mayor investigates the level of enforcement activity around properties that do not have EPCs. We understand that some Trading Standards teams across the UK, including in London, are not prioritising this activity, which undermines the effectiveness of MEES Selective licensing ACE welcomes the Mayor s vision to hold responsibility for considering and approving selective licensing schemes for the PRS. While ACE recommends that London Boroughs work with both landlords and residents before moving to enforcement action, we agree that selective licensing is an important tool in raising standards (in both energy efficiency and wider housing standards) and can result in additional benefits to society such as reducing tax evasion from rental income, immigration enforcement and crime prevention Based on evidence gathered by ACE following interactions with a number of practitioners and key stakeholders Association for the Conservation of Energy Consultation response 5

6 3.2.3 Economic benefit of driving standards in the PRS Research by CAG, ACE, SE2 and CSE for the GLA 11 looked at the cost of meeting the first Minimum Energy Efficiency Standards (MEES) milestone (improvement of all properties to a minimum EPC band C). Building on this research, ACE considers that in London, 1.6 billion investment in energy efficiency would be required to meet these targets 12. Whilst details of these future targets have yet to be determined by BEIS, this analysis provides an indication of the level of investment that would be required. This investment could lead to the installation of 1.47 million measures in London s private rented sector homes and could include, for example: 168,900 new wet central heating systems being installed. 52,400 homes having solid wall insulation. 91,700 homes having cavity wall insulation. 242,100 having loft insulation. 438,200 LED lights being installed. ACE conservatively estimates that this investment in energy efficiency could lead to the creation of at least 2,500 jobs in the sector across London, and an additional 1,700 jobs in the longer term Using data to strategically target fuel poor households and inefficient properties We welcome the future availability of a new open-source pan London Energy Performance Certificate (EPC) data model to enable local government to drive better long term planning of interventions at a property level, and guidance to London Boroughs on how they can legally and responsibly use data to identify households in fuel poverty. ACE would recommend that the Mayor investigates enforcement action for properties that do not have EPCs. As noted in section we have heard that some Trading Standards departments are not enforcing the provision of EPCs when properties are sold or rented. Ultimately this will reduce the effectiveness of the EPC data being used to target properties, and also undermines the implementation of MEES. ACE s Warm Arm of the Law project is looking at data that can be used to strategically target private rented properties, including both EPC and Tenancy Deposit Scheme (TDS) data. We would welcome the opportunity to work closely with the GLA on this issue. 3.3 Household profiles The potential role of energy efficiency in eradicating fuel poverty can be seen in Figure 1 of the draft Fuel Poverty Action Plan, which details the proportion of households in fuel poverty across London (F&G rated properties highest proportion, E rated properties - 3 rd highest proportion). This and the additional data contained within this section of the draft action plan, justifies the targeting of the least efficient properties first. Figure 2 details the number of fuel poor households in London. Fuel poor households are not as prominent within F and G rated properties, while there is a large number of fuel poor households living 11 Fuel poverty in London: Research and Policy Report, CAG, ACE, SE2 and CSE, Based on no more than 5,000 being spent per property. 13 Analysis of Building the Future: The economic and fiscal impacts of making homes energy efficient, Verco and Cambridge Econometrics, 2014: Assumptions include a similar profile of delivery and a similar profile of both public and private investment. Association for the Conservation of Energy Consultation response 6

7 in E rated properties are. This fact underlines the necessity to ensure standards are effectively implemented for F and G rated properties so that they can be targeted at a greater number of properties (E and D rated properties). Figure 2 also justifies the need for the development of grants, incentives and financial products since the highest number of fuel poor in London are living in homes with solid walls. ACE welcomes the focus on vulnerable households, particularly those who are suffering long term illnesses or disabilities. As the draft action plan outlines, such households are significantly more likely to be in fuel poverty compared to other households. Almost one in five of these households were living in fuel poverty in 2014 in London, compared to fewer than 1 in 12 households with no long-term illness or disabilities. There were 158,500 households with a person with a long-term illness or disability in 2014 that were in fuel poverty, comprising nearly half (45.8 per cent) of all fuel-poor households in London. ACE has been working with the University of York on a UKERC funded project 14 looking at justice in energy efficiency policy and programmes. The focus is on the effect of energy efficiency policies and programmes on disabled people and low income families with children, and the project is investigating how energy efficiency policies actually affect these groups, and whether policy outcomes are consistent across the UK. ACE is happy to provide further information about this project to the GLA. 3.4 Grant funding, fiscal incentives and finance Grant funding As noted above, ACE is pleased to see that 10million will be allocated over the next four years to support an energy efficiency delivery programme focussing on fuel poverty and emissions reduction. ACE recommends that grants (rather than loans) are made available for low income households, where savings are often taken in comfort rather than in bill savings and hence loan repayments may not be affordable. We would also recommend that partial public funding is made available to help grow the market and reduce costs for new technologies or those with longer paybacks (for example, solid wall insulation). We agree with the Mayor that London has a poor track record in securing its fair share of energy supplier obligation funding, and welcome the Mayor s proposal to work with energy companies and boroughs, using analysis of EPC and deprivation data, to target their heating and insulation measures at those low-income households that have not previously benefited from ECO (or other support). We would recommend that the Mayor encourages all London Boroughs and the London Association of Local Energy Officers (ALEO) to develop and agree a London-wide definition of eligible households under the ECO flexible eligibility mechanism, and ensure that all London Boroughs have published a statement of intent. We would request that all statements include reference to PRS properties, particularly in light of MEES in its current form (requiring no up front cost for landlords). ACE agrees with the Mayor that carbon offset funding should be used to tackle fuel poverty and we commend those London boroughs who are already taking forward activity in this area (e.g. Islington, Tower Hamlets etc). This approach, while focussed on reducing carbon emissions, should be used to tackle fuel poverty in the capital and we would welcome the Mayor developing guidance to all London Boroughs on how funds can and should be applied to fuel poverty alleviation schemes and the PRS Association for the Conservation of Energy Consultation response 7

8 3.4.2 Fiscal incentives and finance ACE considers that using fiscal incentives and finance propositions to support energy efficiency in domestic buildings can encourage individuals and organisations to act before standards are applied, which in turn can smooth the development of market and the supply chain and increase public acceptance of the standards. The draft Fuel Poverty Action Plan notes that the Mayor will call on government to develop fiscal incentives to increase the uptake of solid wall insulation. While we agree that financial and fiscal incentives need to be developed, we question why there is focus only on solid wall insulation. Broader fiscal incentives, such as a stamp duty rebate, can raise the profile and value of energy efficiency in the wider housing sector. ACE is currently undertaking a sector survey to look at the potential for home-owner incentives. This follows on from an ACE member round-table earlier in the year and is intended to collect evidence that we can all use to inform our work with government and in particular our responses to the call for evidence on building a market for energy efficiency, which was published alongside the Clean Growth Strategy. ACE would be happy to provide the GLA with the results of this survey and work together on the development of proposals in London. ACE welcomes the proposal to work in partnership with health services to develop a strong evidence base showing what healthcare cost savings can be achieved, which would strengthen the case for investment and may enable the development of new financing mechanisms for fuel poverty interventions, for example through social impact bonds. We welcome the announcement 15 about the landmark devolution deal between the Mayor and NHS London to improve health and care across the capital, and hope that this results in greater collaboration with the health sector on fuel poverty. 3.5 Planning As detailed in our response the Mayor s draft environment strategy, ACE would like to see the Mayor look at how planning (and building control) could support energy efficiency interventions. ACE supports the use of trigger points for buildings to meet minimum energy efficiency standards, both in terms of the point of sale and rental of domestic properties. Consideration should be given to those properties that are not sold or rented, and therefore ACE recommends that energy efficiency improvements should be mandated during significant refurbishment activity. The Mayor should be encouraging homeowners to retrofit their properties when they are extending their homes e.g. loft and basement extensions. Households should be encouraged to undertake deep energy efficiency retrofit activities during their property s extension to avoid further disruption at a later date. While the UK Government s Clean Growth Strategy rules out consequential improvements through the Building Regulations, the Mayor should consider whether all London Boroughs could implement Supplementary Planning Guidance (SPG) on this issue. ACE is currently working on a range of ideas on how to integrate energy efficiency into refurbishment work and will be happy to share the results with the GLA once available. We would also like to see the Mayor provide specific guidance to London Borough Planning (and Building Control) departments on the application of solid wall insulation. This has been referenced as a barrier to activity in London for a number of years, yet the problem has not been resolved and approaches are inconsistent across London. We would encourage the Mayor to exert his influence on 15 Association for the Conservation of Energy Consultation response 8

9 London Borough planning teams to encourage greater weighting to alleviating fuel poverty when considering solid wall insulation applications. 3.6 Local government resourcing In addition to the points raised in section regarding activity and enforcement in the private rented sector, there are wider resourcing problems across the London Boroughs 16. To further support activities across other tenures (e.g. owner occupied and social), the Mayor should ensure that all London Boroughs should be adequately resourced to coordinate activity on energy efficiency retrofit and advice services, including: Environmental Health: proactive implementation of HHSRS and MEES. Trading Standards: proactive implementation of MEES and regulations requiring the provision of EPCs. Fuel poverty, HECA, Sustainability, Energy, Housing officers: provision of advice and links with referral agencies, strategic targeting of sub-standard housing. 4 Energy for Londoners ACE welcomes the Mayor s proposal to develop an energy supply company for Londoners, enabling access to fairer energy tariffs. We understand the reasons behind the decision to initially work with an existing supplier. We believe that the Mayor should keep open the option to move to a fully licensed supply company so that properties in London could benefit from energy efficiency propositions as part of an Energy Services Company (ESCO) model, thus integrating demand side actions into the supply company. 5 Working with the UK Government ACE agrees that the Mayor cannot solve the problem of fuel poverty alone, and he should continue lobbying national government on a range of issues: Supporting energy efficiency as a national infrastructure priority. The future changes to MEES to limit exemptions, including the introduction of a cost cap, and ensuring that the regulations are effective in improving the energy efficiency of the PRS. The devolving of powers to introduce selective licensing across London. Improving national funding for energy efficiency improvements, including: o The future development of the Energy Company Obligation (ECO) (as highlighted in the UK Government s Clean Growth Strategy) and ensuring that London receives its fair share of funding. o Securing funding from public health programmes to support fuel poverty and referral schemes. Developing fiscal incentives and financial propositions to promote energy efficiency retrofit across all housing tenures. 16 As detailed in the draft Environment Strategy and this draft action plan, local government resources are limited across the capital. Association for the Conservation of Energy Consultation response 9

10 The development of policy around the energy efficiency of new build homes, to future proof all homes against fuel poverty and ensuring that retrofit works are not required on these properties in the future. Association for the Conservation of Energy Consultation response 10