Energy Efficiency Standard for Social Housing Review Group minutes: January 2023

Attendees and apologies

• Allan Crooks, Scottish Government
• Angela Morgan, Port of Leith Housing Association
• Callum Neil, Scottish Government
• Ciara O'Connor, Scottish Government
• Dave Thomson, Aberdeenshire Council
• David Bookbinder, GWSF
• David Downie, Tenant representative
• Donald Weir, Glen Oaks Housing Association
• Grant Gilfillan, Shetland Council
• Gregor Wightman, Stirling Council
• Ian Dawson, Fife Council
• Janice Pauwels, Scottish Government
• John Devine, ng Homes
• John Smith, South Lanarkshire Council
• Graeme Bruce, Link Group
• Lori McElroy, University of Strathclyde
• Mark McArthur, Energy Saving Trust
• Michael Cameron, Scottish Housing Regulator
• Michelle Rayneard, Scottish Government
• Mike Callaghan, COSLA
• Moses Jenkins, Historic Environment Scotland
• Neil Ritchie (Chair), Scottish Government
• Nick Clark, Ore Valley Housing Association
• Paul Leask, Hjaltland Housing Association
• Roddy Hamilton, Changeworks
• Sally Thomas, SFHA
• Sherina Peek, ALACHO
• Simon Roberts, Scottish Government
• Stephen Devine, Wheatley Group

Apologies

• Bruce Cuthbertson, Tenant representative
• Ken Gibb, University of Glasgow

Items and actions

• SG to share the presentation slides from the meeting. Due February 2023
• Members of the group to suggest any relevant case studies on:
  • funding for works for landlords and owner occupiers
  • on transition from gas to electric heating. Due February 2023
• NR to raise issue of language used in Cost of Living (Tenant Protection) (Scotland) Act 2022: first report to the Scottish Parliament with housing colleagues. Due February 2023
• SG to share metric options paper once reviewed by Subgroup 1 (Just Transition, Metric & Heating System). Due March 2023
• SG to develop a plan for taking forward discussions on risk of stock disposal. Due April 2023
• SG to reflect on how to streamline the application process for the SHNZHF. Due April 2023
• SG to consider emergency redress funding to support just transition. Due April 2023
• SG to consider funding for stock condition surveys. Due April 2023
• LM to share link on mould modelling. Due March 2023 

Welcome and introductions

List of attendees and apologies available.

Neil Ritchie welcomed everyone and thanked all for joining the meeting. The purpose of the meeting is to take stock of where the Scottish Government is at with the EESSH2 review.

EESSH2 Review update

Ciara O’Connor gave an update on the progress of the EESSH2 review to date. The first milestone of the review was achieved with the issuing to landlords of the interim guidance in October 2022. The work of the subgroups is now underway and the discussions from the subgroups will be elevated to the main review group in the coming weeks for decisions.

The minutes from the review group will be published online in the interest of transparency and best practice. Members will be emailed with the progression of this.

Update on subgroups

Subgroup 1 (Just Transition, Metric & Heating System) is due to complete in April 2023. The Scottish Government has prepared a metric options paper, which is currently being reviewed by the subgroup. Following review this paper will be shared with the main review group.

Subgroup 2 (Measures and Finance) is due to have its kick off meeting in the coming weeks.

Subgroup 3 (Fabric & Hard to Treat) is due to complete in April 2023. Research commissioned through ClimateXChange is being undertaken by Element Energy on identifying social housing archetypes.

Subgroup 4 (Gypsy/Traveller Sites) is due to complete in May 2023, as it will react to developments from the other subgroups.

Sally Thomas noted the decisions on the EPC reform will be important for the metric discussions. The consultation on EPCs is due in the Spring. SG confirmed that this had been considered in the options paper.

Implications of the reduced rental income for landlords was noted by Sally Thomas. The agreed average 6.1% increase is still below inflations levels, giving landlords reduced income and more pressurised budgets.

There are plans for a new strategic energy board to be chaired by Professor Lorne Crerar. The format is yet to be decided but it will be set up as an external body by 2025/26 and will run the delivery programmes.

David Bookbinder noted the language used in the Cost of Living (Tenant Protection) (Scotland) Act 2022: first report to the Scottish Parliament (paragraph 6.12) stating that rent levels are adequate to support investment in energy efficiency was not completely accurate. Neil Ritchie to raise with housing colleagues.

Sherina Peek noted Local Authorities are still to establish what the best low and no regrets options for them, so the new target needs to take account of the different positions of Local Authorities and not be to prescriptive. Tenants rents also cannot be relied on to pay for energy improvements.

Work is developing regarding supply chain issues, with SG publishing the Heat in Buildings Supply Chain Delivery Plan last year.

Research on archetypes

Simon Roberts gave an update on the archetypes research. Element Energy is using Home Analytics Data to identify social housing archetypes. The aim is to identify approx. 30 archetypes to cover 90% of social housing stock. The research is due to be completed by the end of March 2023. A representative from Element Energy will be attending the next meeting of Subgroup 3 (Fabric and Hard to Treat) to provide an update on the research. 

On completion of this the thinking will turn to how we can develop pattern book solutions for these archetypes to help landlords identify cost effective solutions. The ZEST report recommended a technical working group having oversight of developing solutions long term for archetypes. SG intends to begin with four in a block to use as a model for what a pattern book would look like.

Points raised by the group on the development of pattern book archetype solutions included the following:

• important to recognise the pattern books are not a one size fits all solution and that a detailed understanding of stock is still required of landlords
• we need to ensure that mixed tenure blocks do not get left behind
• landlords will be required to make decisions on suitability and cost effectiveness of investment – what happens with stock that is not cost effective to improve?
• demolition is the least preferred option planning policy, so need to ensure EESSH does not conflict with this
• SG to integrate discussions on risk of stock disposal – given the housing crisis could there be an allowance for exemptions?
• ventilation must be considered to prevent risk of mould – monitor retrofit properties
• Lori McElroy advised of modelling available for different types of mould that are a risk at design stage – Lori to share link to this – based on work done by the Energy Systems Research Unit at Strathclyde University, embedded within their dynamic simulation model
• noted it is difficult to change tenant behaviours when it comes to heating systems
• pattern book solutions would provide a common methodology, could a risk of condensation analysis be included

Case studies

SG is putting together a small number of case studies to show examples of different solutions for varying house types. They will show lessons learned and the tenant/landlord experience.

4 case studies have been identified so far, with SG asking the review group for any examples of:

• funding for works for both landlords and owner occupiers
• transition from gas to renewable electric heating or renewable heating ready

It is important to note that the case studies will just be an example of what is possible, but landlords will need to understand and evaluate their stock before planning their energy improvements.

John Devine noted ng Homes have completed two projects that could be used to assess heat pump noise and a district heating system and lessons learned from this.

In the discussion it was suggested that case studies should be properly appraised with regard to their success, tenant experience and reflect any intelligence from monitoring post- install, if available. 

Update on the Green Heat Finance Taskforce

Michelle Rayneard (Future Finance Team, Scottish Government) gave a presentation on the Green Heat Finance Taskforce, slides to be shared.

Points raised by the group included the following:

• Social Housing Net Zero Heat Fund (SHNZHF) - More development funding is important for landlords – shifting the balance from capital funding
• shared learning from what has been funded would be beneficial
• the SHNZHF needs to be more accessible and less bureaucratic 
• funding is limited in timescale, which causes problems since it takes time to plan and implement energy efficiency upgrades before installing net zero heating – fabric first important so as to not putting people into fuel poverty
• there are up-front costs for landlords to get to position of submitting an application to the SHNZHF, giving landlords a degree of risk
• is an emergency redress fund possible as a safety net for tenants?
• could funding for stock condition surveys be provided by SG?

Janice Pauwels confirmed the Scottish Government is looking at ways of speeding up the response times for SHNZF applications; a balance is required between getting the right information  in an efficient manner, given the funding is public money. Also looking at shifting the balance between development and capital funding and will look into redress funding to support just transition and funding for condition surveys.

Innovative finance mechanisms will be essential to achieve net zero.

Potential for social housing support unit

Allan Crooks gave a presentation on the potential for a Scottish Government Social Housing Support Unit, slides to be shared. The unit would offer support on areas like preparing tender documents and procurement.

Discussions on a procurement framework – could this be a multidisciplinary framework? Due diligence would be required to give landlords assurances of standards and performance. The framework should be broad, from early conceptual thinking through to installation.

The ability to share support given to landlords about projects and on good practices would be beneficial – knowledge hub for social housing.

The importance of adding value to what is already available was noted along with working together to ensure existing networks are as efficient as possible.

It was also noted it will be important not to overlap existing work, e.g. current projects with Scottish Futures Trust.

There could be opportunities to work with energy companies, including a publicly owned energy company.

Financial support schemes available to social housing providers 

Mark McArthur gave a summary of the funding schemes available to landlords – slides to be shared.

The schemes are helpful; however, fabric first funding is limited to ECO. It is difficult to achieve the required increase in EPC banding for ECO funding when the necessary ventilation and electric heating systems are installed.

It is difficult to get owner occupiers engaged in energy efficiency improvements in mixed tenure, especially in the current cost of living crisis.

Mark offered to provide update sessions on financial support available to landlords. Energy efficiency funding table also to be uploaded to objective connect for the group’s reference.

Any other business

The next meeting is to be scheduled for April 2023.