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

Background

Introduction

1 We said in last year's housing policy paper, Homes Fit for the 21st Century, that we would develop a sustainable housing strategy bringing together policies on climate change, energy efficiency, fuel poverty, planning and the built environment. Last November the Infrastructure Investment Plan ^[2] , signalled the Scottish Government's intention to 'deliver a step change in the provision of energy efficient homes to 2030 through new-build programmes and the retrofitting of existing homes'.

2 Sustainability ^[3] is integral to the Scottish Government's overall purpose - to focus government and public services on creating a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth. Scottish Ministers have set world-leading climate change targets and the Low Carbon Economic Strategy ^[4] positions Scotland as a major player in the development of global low-carbon markets.

3 Growing demand for housing from an increasing number of households means we need to transform the way we build, value and live in our homes. Our ambition for a transformation in the energy efficiency of existing stock and new homes that meet the highest sustainability standards will bring significant opportunities for innovation and investment in the housing sector.

4 This strategy will set out our vision for warm, high quality, affordable, low carbon homes that will help to establish a successful low carbon economy across Scotland. This reflects the Scottish Government's overall vision for housing ^[5] , which includes enabling people to be able to live in warm homes that are resource efficient in the way that they are built, retrofitted, heated and maintained.

5 The Strategy focuses on improving the energy efficiency of housing to support our fuel poverty and emission reduction objectives, while recognising the wider aspects of sustainability that is addressed in more detail in other Scottish Government documents ^[6] . As well as action to improve the energy efficiency of existing houses, it also considers how to ensure that properties are well maintained to retain the benefit of energy efficiency measures and provide safe, quality homes to live in and meet people's needs over the longer term.

How this consultation document has been developed

6 To support this work the Cabinet Secretary for Infrastructure and Capital Investment set up a Sustainable Housing Strategy Group ( SHSG) with members drawn from the housing, energy, fuel poverty, consumer and environmental sectors (see Annex A ). The group has met regularly since October 2011 and has discussed and contributed to early drafts of this paper. All the papers considered by the Group are available on the Sustainable Housing page of the Scottish Government website.

7 A relationship diagram showing the links between the Group, other key bodies and workstrands and the themes of the strategy is shown in Annex C . SHSG members have agreed to allow their organisational logos to appear within this strategy on the basis that they have contributed to its development, recognise the importance of the issues raised and the need for debate. However, this does not confer their approval or agreement to all the detailed material in the document.

8 In between formal meetings a number of events with stakeholders have helped to shape this draft strategy.

• Housing developers, finance and technology experts took part in a Greener Homes Summit in November 2011, getting involved in a discussion about how Scotland can exploit opportunities for investment in sustainable housing - and identifying the main themes for this strategy. The Summit established the key principle of a "fabric first" approach in which insulation and other building fabric measures were prioritised over and above more innovative technologies with longer pay-back periods. This would mean development costs could be controlled and achieve greater economies of scale.
• Members of SHSG took part in a seminar in February 2012 to discuss recommendations from a 'Housing Futures' research project on priorities for the next decade.
• Another seminar with members of the SHSG in April 2012 focused on proposals for a national retrofit programme and standards for existing homes.
• A sub-group of the 2020 Climate Group contributed significantly to the chapter on financial market transformation.

9 Publishing this draft for consultation is the next stage in developing the strategy. We want as many people as possible to consider our proposals and let us know their views to help shape a final strategy for sustainable housing in Scotland. It is relevant to a wide audience, including local councils, the building industry, private and social landlords, home owners and tenants. We particularly want to hear how it may affect different groups of people, for example those with disabilities, older people, those from different ethnic backgrounds or cultures.

Why we need a sustainable housing strategy

10 Scotland has set out world leading emission reduction targets and made a commitment to tackle fuel poverty. These commitments are described in box 1 below.

Box 1: The Climate Change (Scotland) Act and fuel poverty

The Climate Change (Scotland) Act 2009 sets world-leading targets for Scotland to reduce its greenhouse gas emissions – 42 % by 2020 and 80% by 2050, compared to the 1990 'baseline' year. Low Carbon Scotland: The Report on Proposals and Policies sets out the homes and communities contribution to these targets.

Section 60 of the Act requires Ministers to publish a plan for promoting and improving energy efficiency and to set targets for improvement. The Energy Efficiency Action Plan has set a target to reduce energy consumption by 12% by 2020 compared to a baseline average taken over three years (2005-2007).

Fuel poverty
Scottish Ministers have a commitment to 'to ensure, so far as reasonably practicable, that people are not living in fuel poverty by 2016' (Scottish Fuel Poverty Statement, 2002). The statement fulfils Ministers' duty under Section 88 of the Housing (Scotland) Act 2001 to publish a statement saying how they will eradicate fuel poverty in Scotland and their target date for doing this.

11 Housing and activities within the home account for more than a quarter of Scotland's carbon emissions and nearly a third of its energy use. In 2009, according to the Department for Energy and Climate Change, nearly two-thirds of all energy used in homes was used for space heating and a further 18 per cent of energy was used for water heating. As might be expected, domestic fuel consumption (both gas and electricity) are higher in Scotland than in other parts of Great Britain. ^[7] With a steadily growing number of households we must act now to make sure homes are energy efficient, and designed or adapted, so that living in a sustainable way becomes the norm in the years ahead. National Records of Scotland estimates that over the next two decades the number of households could increase by more than a fifth - an average of 19,250 extra households each year.

12 Demographic trends have implications for the size, type and location as well as the number of houses that will be needed in the future. Overall, the household projections suggest we will need around 450,000 extra homes in Scotland to meet expected demand by 2033 ^[8] . But the changing profile of households suggests there will be much less need for large detached houses and more for housing to meets the needs of smaller, older households, with lower running costs, access to services and good transport links. The Scottish Government recognises this in its Strategy For Housing For Scotland's Older People ^[9] : 'Our vision for 2021 is that a greater proportion of older people will live in well-maintained and warm homes, which are adapted where necessary, and which increase their independence and quality of life.'

13 Sustainable, energy efficient housing will be more comfortable, easier and cheaper to run as well as better for the environment. Household energy costs rose by 76 percent in real terms between 2000 and 2010 and there is every indication that prices will continue to rise because of pressures in international energy markets. Households on low incomes suffer disproportionately from cold weather and high fuel bills. A sustainable housing strategy will to help to tackle the injustice of fuel poverty as well as driving forward the low carbon economy.

Scotland's housing and progress so far

14 Scotland's housing and communities are diverse and our strategy needs to recognise that. Around a fifth of the Scottish housing stock is now over 90 years old and a third is more than 60 years old. A fifth of the stock has been built within the last 30 years. Detached houses have dominated the new-build market since the early 1980s. This contrasts with earlier periods - a large proportion of pre-1919 dwellings were tenements, while semi-detached and terraced housing predominated between 1945 and 1982. Although age is also a factor (older housing tends to have higher carbon emissions) detached houses have the highest level of CO2 emissions and tenements the lowest. This can be seen in figure 1 below, which compares carbon emissions by type of house over the last few years. ^[10]

Figure 1 - Average CO2 emissions (tonnes per year) 2003-4 to 2010 by dwelling type ( SHCS, 2010)

15 Overall, the chart shows some reduction in carbon emissions since 2003, with a more marked decrease since 2007. This reflects (at least in part) the fact that the Scottish Government has been working hard over the last few years to make houses more energy efficient and to meet targets under the Climate Change (Scotland) Act and Ministers' commitment to tackle fuel poverty and reduce energy use. We have a successful track record of running area-based home insulation schemes, drawing in substantial private funding through energy company obligations to supplement Scottish Government funded programmes.

• Since 2009 our Home Insulation Scheme and its successor, the Universal Home Insulation Scheme, have offered energy advice and free or very low-cost insulation to over three-quarters of a million households in Scotland.
• Over the last year the Universal Home Insulation Scheme has drawn in £500,000 in private funding, through energy company obligations, for every £1 million of Government funding.
• The Scottish Government also provides incentives for householders to replace old inefficient gas boilers through its Boiler Scrappage Scheme.
• Our four-stage Energy Assistance Package aims to tackle fuel poverty as well as emissions. By April 2012 more than 200,000 households had been assisted and the scheme had been extended to include a wider range of vulnerable groups and carers.

16 There is more information about Government-funded programmes in Chapter 1. The full range of our actions to improve the energy efficiency of our housing is set out in the annual report on progress on Conserve and Save, our Energy Efficiency Action Plan for Scotland, published in October 2010 ^[11] .

17 Figure 2 shows the change in home energy efficiency ratings over the last decade, based on the National Home Energy Rating ( NHER).

18 Scottish Government schemes, and progressive enhancements to building standards, have already contributed to significant improvements in energy efficiency. But we know that much more has to be done to achieve the transformational change required over the next decade or two. Without such a change, despite our best efforts, rising fuel bills threaten to push ever more households into fuel poverty while growing household numbers are a challenge to Scotland's climate change and energy efficiency targets.

Figure 2 - Percentage of dwellings by NHER bands 2002-2010 ( SHCS, 2010)

Our vision - towards 2030

19 Looking further ahead, our strategy will set out our vision for warm, high quality, affordable, low carbon homes and a housing sector that will help to establish a successful low carbon economy across Scotland. 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 and sectors to contribute to and benefit from Scotland's low carbon economy and to drive Scotland's future economic prosperity.

20 The strategy's main themes emerged from the Greener Homes Summit. We believe that by addressing these inter-linked issues we can meet our objectives. They are:

• A national retrofit programme to tackle fuel poverty, ensure we meet the climate change milestones set for housing and enable Scottish households and businesses to get maximum benefit from energy company and other investment.
• Standards - to consider the role that regulation could play, alongside incentives, in driving uptake of energy efficiency measures.
• Financial market transformation to create long-term change in perception among surveyors, lenders and consumers of the real value of low carbon, energy efficient homes - in order to drive the market.
• New build market transformation to maximise the potential of the innovative design and construction techniques being developed by Scottish companies to create greener homes and neighbourhoods, which will in turn create export and other economic opportunities.
• Skills and training to capitalise on opportunities to make Scotland a market-leader in providing and exporting low-carbon housing solutions.

21 Each of these themes is explored more fully in the following chapters. The need to influence behaviours - of all players and at all stages of the move to a more sustainable housing sector - is an over-arching theme which runs through the strategy.

Q1: Are the vision and objectives as set out in sections 19 and 20 appropriate for Scotland's Sustainable Housing Strategy

Please answer Yes or No and provide further explanation if you wish.

22 This consultation document provides the strategic context and overall framework for sustainable housing. A separate consultation on a new Energy Efficiency Standard for Social Housing has been published alongside this paper, together with draft impact assessments.

23 It is intended that this strategy will stimulate action that impacts positively on climate change and hence on the environment. Consideration has been given as to whether a full Strategic Environmental Assessment was required and a Screening Report was submitted to the consultation authorities, Scottish Environment Protection Agency, Historic Scotland and Scottish Natural Heritage. Their view confirmed our own, that this strategy sits within a hierarchy of other plans and proposals that have already been undertaken or will undertake full assessments in future, and thus to proceed with an SEA would not be necessary at this stage. The Screening Report and determination are available on the Scottish Government website ^[12] . An Interim Equality Impact Assessment and partial Business and Regulatory Impact Assessments will also be available on the Sustainable Housing pages of the website.

24 We will also publish an updated Greener Homes Prospectus alongside this strategy. The Prospectus provides guidance and case studies and updated information on sustainable housing developments in Scotland, costs and payback on technologies and methods of construction.