Big news: some landlords of some properties might have to improve them by 2018

I’ve asked a couple of questions recently about when DECC intends to end the suspense over the commitment they made in the Energy Act before last (the Energy Act 2011). This commitment requires landlords of private rented properties to bring their houses up to scratch, as far as energy efficiency is concerned, or risk not being able to let them after 2018. Now I was on the 2011 Energy Bill Committee and naively, thought that this would be fairly simple to make happen. So simple, in fact, that, along with some other colleagues in the Bill Committee, I proposed an amendment pulling the date for compliance forward to 2016.

In the end, it was 2018 that made it into the legislation. And the Act states that, some time before 2018, ‘the Secretary of State must make regulations’ setting out how landlords of properties ‘in relation to which there is an energy performance certificate (EPC)’ must get their properties fit for letting by 2018. No level of efficiency is mentioned in the Act, but the talk at the time was that the expected EPC level to be attained would be the not exactly stunning level of ‘E’ or above. But nevertheless, capturing a swathe of properties which are notoriously poorly insulated and which are statistically disproportionately inhabited by people in fuel poverty would be a real step forward.

And then…silence.

At the last DECC questions before the recess, I was very pleased to hear my colleague, Jonathan Reynolds, receive a clear commitment from the Minister, Greg Barker, that DECC will definitely be consulting on the matter this summer. Just …er…two years and eight months after the Act became law.

So that’s all fine then (I’ve noticed that I keep using this phrase as an irritating stylistic device in a number of blog entries over event months…). Well not exactly (and I’ve noticed myself adding this even more irritating rejoinder on numerous occasions. In my defence, there is a clear ‘not exactly’ in this story, so it will have to do. I promise not to do it again though).

The ‘not exactly’ here is that, when the original clause went into the Bill, the Minister guiding it through (yes it’s our old friend Greg Barker again) seemed pretty certain that it applied to all rented property and all landlords. And I am afraid to say, the committee did not then examine the issue much further. But in fact, if you read the legislation fairly carefully, it doesn’t appear to apply to the whole sector.

Basically, the Act refers to ‘the property’ of the landlord throughout the clauses dealing with the 2018 requirement. What that means, it appears, is that a landlord who is renting out a ‘property’ will have to have to produce an EPC for that ‘property’ at an ‘E’ rating or above before he can let it out after 2018.

But, as may have been spotted by many people who rent such properties, landlords very often do not let out ‘a property’; they will let out rooms in a property, perhaps at different times. Something like 14,000 such properties – so-called houses in multiple occupation – in my city, Southampton, are let out in this way. On the face of it and as matters stand, it looks like a high proportion of ‘properties’ will simply be exempt from the requirement for this reason.

I did move a ‘ten minute rule‘ Bill a while ago to try to plug this gap with some simple wording to make the intention of the Act plain but unfortunately it went the way of all such Bills. So it’s now all down to the consultation, which is what the very same Minister told me in response to one of my questions (this is where we started at) which asked about whether the regulations would seek to include HMO landlords in the Act or not.

So I guess we will have to wait and see. I understand that nice Mr. Pickles over at DCLG is not keen at all on any regulations being laid, let alone any that include HMO landlords, so I’ m sure Greg will need all his legendary courage and fortitude to ensure this happens.

Making community energy strategies work

Two cheers go to DECC for publishing its Community Energy Strategy.  It’s been long overdue; energy production and energy saving at community level has long had enormous potential. Indeed, other parts of Europe are far ahead of us in this context. For example, in Germany almost 50% of energy generating plant is owned or run by local groups. This makes for an entirely different landscape as far as the generating market is concerned, as well as providing resources and income for local communities themselves as a result of those generation activities.  And you could of course say that we’ve been through an extended period of reduction in what might be regarded as community energy. After all, what were the original town gasworks if not a long-lost version of this very concept? Indeed up to the end of the last war, local authorities in the UK generated almost 50% of their income from trading up, mostly through the aforesaid gas works and local electricity plants.

To some extent, DECC’s Community Energy Strategy follows the increasing trend of communities beginning to take matters into their own hands as far as local energy is concerned. But it also puts the emphasis on newer technologies – running small scale onshore wind farms and securing the proceeds for local use; installing community level solar plants; developing local purchasing schemes to benefit from bulk energy  supply in off grid areas and beginning to develop local district heating schemes that also generate electricity through CHP plants.  As the Secretary of State describes in his forward to the report, with a really fair wind we could see a substantial return to a localised energy landscape, with the possibility of schemes involving local communities supplying enough electricity for 1 million homes by 2020. That level of provision would take community energy out of the niche into which many ‘exemplars’ of community action are often placed in – interesting but inherently small time – and into the realm of significant. Furthermore it would also secure contributions to the national energy balance.

The report also mentions the possible role of the community in the other side of the equation – energy efficiency and demand side reduction – and the role that communities can play in developing their own programmes of mutual benefit through saving energy.  I personally think there is more than a little mileage in the concept of local authorities looking to be the providers of retail energy supplies. Imagine perhaps that you get your dual-fuel bill from a consortium of local towns that have together secured the supply to put into the grid.  It wouldn’t be desperately difficult to do and would secure the proceeds of energy supply for local purposes. Essentially it would finally take us back, almost full circle, to the old town gas works supplying their towns.

So there’s much to praise about the new strategy if it really can get momentum into the process. And, as is apparent, this won’t come solely from the pretty modest level of funding that might come forward. Rather, it is easing the ability of local communities to take action, supporting them when they do, and placing in their path the opportunities for securing successful partnerships that will enable local projects to fly.

That’s not quite the end of the matter though.  I can’t help thinking that for any sort of community energy strategy to work, there needs to be some joined up policy between DECC, local government institutions, and the Treasury (to name but three departments) to ensure that the landscape really is propitious. One very recent example which evidences the need for such cohesion well comes to mind.  The Community Energy Strategy tells us that the department is going to have ‘a programme of engagement with communities and local authorities in the Energy Companies Obligation’. But wait, haven’t we heard that somewhere before?  A number of local authorities and local communities HAVE been very engaged in ECO, to the extent that they were doing exactly what the strategy says – getting local partnerships together, securing external funds, building local interest, and easing the path for large schemes of community energy efficiency uplift – using ECO. The local authority in Southampton (which is my constituency) has, among a number of others, enthusiastically trodden that path.  Southampton was about to sign up for a programme that would have secured the cladding of hundreds of hard to treat homes, to the immense benefit of local residents. But then the Prime Minister ‘reviewed’ ECO, as I predicted he might in the last column I wrote here. The result of that review has been that such schemes up and down the country have seen partners pull out because they are no longer obliged to bank the carbon savings they thought they were obliged to over the period originally stipulated.

The net result of this is that some very bruised local communities and local authorities may not go near such schemes again because of the mess they now find themselves in as a result of believing that such community energy projects could work. It’s all well and good to have a strategy but it will only be as good as what follows from it. More work to be done here I think.

This article was first published in The Environmentalist magazine.

RIP ECO

Obscure reference: this one’s still there…

Obscure reference: this one’s still there…

There’s a major catastrophe under way and, as far as I can see, with a very few honourable exceptions, no-one’s reporting on it, but it’s a catastrophe nevertheless. The hon. exceptions are the estimable Inside Housing and the Guardian (only they seem to have moved on).

The catastrophe I’m talking about is that the whole programme of solid wall insulation as we know it, which is supposed to be advancing via the Energy Companies Obligation, has almost completely disappeared before our eyes.  And it’s a catastrophe for the simple reason that Britain has some of the least energy efficient housing in Europe. So much so that if we do not seriously get to grips with our collective home energy efficiency now, then we severely lessen any chance we might have to reduce overall carbon emissions to anything like acceptable target levels by the 2030s. And of course it isn’t just me saying that;  the Committee on Climate Change is clear that to meet the terms of the third carbon budget (early 2020s) we need to have externally clad (or otherwise insulated) something like 2.2 million homes. By the fourth budget (assuming the government doesn’t abrogate its commitment to it) some 3.5 million homes will need to have been treated.  Last year, as DECC records, about 16000 such homes were clad, making it only a matter of …ooh…230 years or so before the 2020s target is reached.

And over the past few weeks it’s become apparent that any hopes that we might have had of some progress, any progress, being made in that fundamental task are being dashed. This is because energy companies are pulling out of what could have been the white hope of ECO; the local area-based schemes that had been developed in good faith by local housing associations and local authorities across the Country.

Because ECO placed an obligation with a challenging level of carbon reduction on energy companies up to 2015, some solid –looking partnerships had developed between social landlords, local authorities, energy companies and others. The aim of such partnerships was to discharge parts of those obligations through the treatment of thousands of solid wall and hard to treat properties using an area based approach.  In Southampton a deal to begin such a programme was at an advanced stage; deals had been struck, partners agreed, programmes designed at no little cost to the local authority, and residents had been informed that cladding and a potential considerable reduction in their bills was soon to arrive.

But now as a result of the lengthening of the ECO’s ‘commitment’ and the emptying of the CERO part of the scheme to fund easier to achieve treatments, e.g. loft and cavity foam measures (which should have been the province of the Green Deal), virtually no area based schemes, as far as I can see, are now standing. The energy companies, being no longer obliged to work at the speed or to the extent that they previously were, are simply pulling the plug on their contributions.  Technically, the ECO extension until 2017 means that companies will now be obliged to only insulate around 100,000 homes by 2017, instead of the target of about 180,000 by 2015. Because of the way the ECO obligation is calculated, energy companies can now plump for cheaper measures in order to discharge their obligation.  Bearing this in mind, I would be most surprised now if anything like that number of properties are actually insulated.

It might be worth reminding ourselves of what was put forward as a real prospectus for ECO less than two years ago. Then the government said:

One of the major challenges for the ECO and Green Deal is the changing nature of the types of measures that need to be delivered. CERT, by focusing on delivering low-cost measures, has been very successful at installing simple loft and cavity wall insulation. From 2012 Green Deal finance will offer a route to deliver the remaining low cost loft and cavity wall opportunities at no upfront cost and without need for subsidy. However to meet our carbon budgets cost effectively, we will need to go far beyond just lofts and cavity walls, and move towards the next most cost effective measures.

However, some 7 million of the most difficult to treat homes require some form of solid wall insulation. The Committee on Climate Change recommended in their 2009 Report, ‘Meeting Carbon Budgets – the need for a step change’1that 2.3million solid wall homes will need to have taken up solid wall insulation by 2022 in order for the UK to be on track to achieve carbon budgets. ECO support for these properties will help drive this market, and the supply chain to fulfil it, enabling us to unlock the resulting carbon savings more cost effectively.

Now the Green Deal is on life support and ECO is in ruins. Quite a catastrophe really.