Homes that don't cost the earth: a consultation on Scotland's Sustainable Housing Strategy

Executive Summary

Our vision - towards 2030

1 The Sustainable Housing Strategy will set out our vision for warm, high quality, affordable, low carbon homes and a housing sector that helps to establish a successful low carbon economy across Scotland. Our route-map to 2030 sets out the key steps we need to take. The strategy's objectives are to :

• deliver a step-change in provision of energy efficient homes to 2030 through retrofit and new build, as promised in the Infrastructure Investment Plan;
• ensure that no-one in Scotland has to live in fuel poverty, as far as practicable, by 2016;
• make a full contribution to the Climate Change Act targets, as set out in the Report on Proposals and Policies; and
• enable the refurbishment and house-building sectors to contribute to and benefit from Scotland's low carbon economy and to drive Scotland's future economic prosperity.

2 This consultation document has been developed with input from the Sustainable Housing Strategy Group, chaired by the Cabinet Secretary for Infrastructure and Capital Investment, and made up of leading organisations from the housing, fuel poverty, environmental and consumer protection fields. Its five themes emerged from the Greener Homes Summit held last November. We have focussed on the energy efficiency component of sustainability, while recognising the wider aspects of this agenda which are set out in more detail in other Scottish Government documents.

A National Retrofit Programme

3 Around 85 percent of homes in Scotland today should still be in use when our final emission targets are to be met in 2050. That means we must focus on the existing housing stock in order to tackle fuel poverty and achieve the housing milestones needed to meet our emissions targets ^[1] . These milestones are:

• Every home to have loft and cavity wall insulation, where this is cost-effective and technically feasible.
• Every home heated with gas central heating to have a highly efficient boiler with appropriate controls.
• At least 100,000 homes to have adopted some form of individual or community renewable heat technology for space and/or water heating.

4 We need a national programme which prioritises action to tackle fuel poverty, while maximising the measures and funding opportunities available to all, as part of a planned and co-ordinated approach, backed by standards, where necessary. We want to make Scotland the most attractive place in Great Britain for energy companies to invest to meet their obligations which opens up the prospect of a combined energy efficiency funding pot of at least £200m per annum, in addition to contributions from householders themselves.

5 The Fuel Poverty Forum has been working with the Scottish Government to advise on the principles of a new fuel poverty and energy efficiency programme, in the context of new UK schemes, ECO and Green Deal being introduced in the Autumn. This will lead to a new National Retrofit Programme from April 2013, with a leading role for local councils, making an offer available to all households in relevant areas. This may include free or discounted measures, interest free loans and the Green Deal, working alongside the Warm Homes Fund. The programme would prioritise fuel poor areas first and cover the whole of Scotland in around 10 years finishing the job started by our area-based insulation schemes.

6 Stepping up the level of energy efficiency work across Scotland will involve developing delivery models that go beyond fuel poverty work, in line with local housing strategies, taking advantage of the opportunities associated with the Green Deal and ECO and securing economic benefits for local people. To help with this, the Scottish Futures Trust has examined emerging Green Deal delivery models.

7 We welcome your views on what action Scottish Government, local councils and other partners should be playing to maximise uptake of the measures needed.

The Role of Standards

8 For people to live in warm, high quality, affordable, low carbon homes by 2030, we need to consider what action is necessary to improve both the physical condition and the energy efficiency of housing, including the use of regulation and enforcement powers.

9 This chapter seeks views on possible legislative amendments that could help improve private sector house condition and energy efficiency, particularly in tenements. It highlights work being consulted on concurrently in relation to setting minimum standards for energy efficiency in the social sector, and, it seeks views on issues affecting the potential future use of minimum standards for energy efficiency in the private sector.

10 Scottish Ministers stated in March 2011 that powers to set minimum standards in private sector housing - owner-occupied and privately rented - would not be used before 2015, but the date at which they could be applied from is still to be determined. The purpose of this consultation is to provide further steers on the key issues which will be developed by a working group, drawing on interests from a variety of backgrounds, as part of the implementation of this strategy. The new devolved Scottish land transaction tax to replace Stamp Duty Land Tax could provide a potential longer term option for promoting energy efficiency.

11 Key issues on which we seek your views include:

• Should local authorities be able to require that owners improve their properties in the same way they can require that they repair them?
• What should be the role of regulation of energy efficiency and the provision of incentives ?
• If, how and when should regulation be introduced ?

Financial Market Transformation

12 Energy efficient homes should be warmer and cheaper to run because of lower energy bills and may even attract tariff income. However, this is not currently reflected in more favourable lending terms or higher property values. This is due to two inter-linked factors -the current systems, practices and regulatory frameworks for valuing properties and advancing loan finance, and the knock-on effects these have on the priority consumers place on having a sustainable, energy efficient home.

13 Similar issues affect housing quality and maintenance. Although home owners are spending more than £2bn each year on their homes, the underlying level of disrepair is not improving. We want to encourage a greater emphasis on structural work and routine maintenance, as opposed to more cosmetic improvements.

14 Our vision is to see a housing market where sustainability, for both new and existing housing, is positively valued by consumers and attracts a financial premium. This is needed to drive the market for the action needed to achieve our emission reduction and fuel poverty goals and improve the quality of our homes. Whenever householders or landlords are making choices about improving their homes, we want the default option to be a sustainable one.

15 The kind of change we want to see will take time to achieve, however we need to start now.

• We will build on the work that has already taken place with lenders, valuers and other partners, within the context of UK legislation, to identify how practice can be changed to recognise the value of greener homes; and to encourage extending the development and use of 'green mortgages', that recognise and reward the added value in low carbon homes, beyond their current niche position in the market.
• We will continue to share information and evidence on the benefits of more sustainable housing, for example, through the Greener Homes Network, Energy Saving Scotland Advice Centres and the Greener Together campaign building on the evidence from research into how behaviour change works.
• We have set out a Private Sector House Condition Action Plan designed to support a cultural shift in how home owners approach the maintenance of their home.

16 We welcome your views on these actions and what else may be required to ensure that sustainable housing is appropriately valued in order to drive the market.

New Build Market Transformation

17 National Records of Scotland projections show that we will need around 450,000 extra homes in Scotland to meet expected demand by 2033. We want to work with the building industry to maximise the potential of the innovative design and construction techniques being developed here in Scotland, not only to deliver more sustainable homes and neighbourhoods, but also to create export and other economic opportunities. This will help to meet the expected future demand for homes in a more sustainable way that supports the low carbon economy and prevents fuel poverty.

18 Regular reviews of Scottish building standards will take us closer to our aspiration of net zero carbon new homes, if practicable, alongside our system for sustainability labelling of new buildings. However, we propose further action to support the transformation of the delivery of new homes, including:

• Promoting good practice in design and place-making to ensure that these new low carbon homes are part of sustainable neighbourhoods.
• Incentivising innovation and modernisation through our £710m Affordable Housing Supply Programme.
• Reviewing construction procurement arrangements, including those for affordable housing, to support greater consistency of procedures and improve delivery across the Scottish public sector.
• Using examples and case studies in our Greener Homes Prospectus, to be published alongside this consultation, to demonstrate how high quality materials and modern methods of construction can deliver cost-effective outcomes.

Skills and Training

19 Making Scotland's homes more energy efficient has the potential to create many jobs in the years to 2030 - in building new homes, upgrading existing ones, installing domestic renewable technologies and developing export markets. This will require new skills, for example, to enable greater use of modern methods of construction, and changes in the pattern of skills, for example, multi-skilling to enable retro-fit. It will also require the retention of specialist traditional skills so that older buildings can make their contribution. We will only be able to take advantage of these opportunities with a skilled and adaptable workforce that meets the new requirements.

20 We need to encourage the industry to recognise the important role of training, even in times of economic difficulty, in preparing for the opportunities for growth. Given the scale of opportunities that should be on offer, there may also be the need for new recruits, including women and others currently under-represented in the industry, or returners affected by the recent economic downturn.

21 We are contributing to this through Scottish Government's National Training Programmes which commit to a record 25,000 Modern Apprenticeships in each year of this parliamentary term with at least 500 of these places in energy and low carbon industries.

22 The introduction of the Green Deal will result in training being required for Green Deal assessors, and potentially an element of upskilling for installers.

We are mapping out the existing provision and potential relationships between our Scottish Government funded fuel poverty and energy efficiency programmes and Green Deal delivery models. This will enable us to develop a strategic approach to delivering the relevant training provision to meet industry needs.

Action on all of these themes will be required to meet our objectives and we welcome your views. The key steps towards our objectives are set out in our route-map to 2030.