Scotland's Sustainable Housing Strategy: Analysis of Responses to 'Homes that Don't Cost the Earth' Consultation

Executive Summary

Key findings

• A large majority of respondents (80%) supported the vision and objectives set out in Scotland's Sustainable Housing Strategy for warm, high quality, affordable, low carbon homes. There was more unqualified support for established and familiar approaches such as information programmes, incentives and area based approaches than for mandatory higher standards for existing housing.
• National Retrofit Programme (NRP): Several key representative bodies expressed strong support for the National Retrofit Programme. Many respondents indicated a desire to retain successful elements of recent energy efficiency programmes in the design of the NRP: both a 'universal' area-based programme and a demand-based programme for vulnerable households, delivered via Energy Saving Scotland advice centres, together with local authority leadership, on a partnership model.
• Grant levels would be critical, given that the principal challenges were effective solutions for hard-to-treat homes. Longer-term funding would increase the take up and efficiency of programmes. Some respondents advocated whole house solutions as representing better value than piecemeal measures.
• The Role of Standards: There was majority support for consideration of a minimum condition standard beyond the tolerable standard, with slightly less support for a minimum energy efficiency standard to apply to private sector housing. The latter was a key theme of the WWF campaign. However most responding organisations were concerned about the resourcing and practicalities of enforcement, and particularly in relation to a private sector energy efficiency standard, the potential impact on the owner occupied sector where conditions applied at the point of sale might further depress house sales.
• Many supported incentives such as rebates on council tax and Land and Buildings Transaction Tax, allied to promotion of a better appreciation of energy efficiency through information campaigns, improved guidance on technical solutions, and monitoring of the success of improvement programmes.
• Financial market transformation and new build market transformation: The current economic climate and state of the housing market, together with reduced levels of funding in local authorities and RSLs were seen as important contextual factors. The current state of the construction industry made it more difficult to contemplate innovation or indeed speculative investment in upskilling or training (see also following paragraph). Mortgage valuations reflect consumers' priorities and still do not reflect energy efficiency improvements. Both RSLs and house-builders need the security of long term funding programmes to develop cost effective planning and procurement in both new build and retrofit.
• Skills and training: Potential cuts in college provision would make it less likely that Scotland could both upskill its workforce and train sufficient entrants to take advantage of low carbon opportunities.
• A common theme of responses to many questions was the need for information and sharing of knowledge, to raise awareness of benefits, improve confidence in technologies, clarify funding routes and publicise other types of support.

Context

1 'Homes Fit for the 21st Century', the Scottish Government's housing strategy for the next decade, included a commitment to develop a sustainable housing strategy for Scotland bringing together policies on climate change, energy efficiency, fuel poverty, planning and the built environment. 'Homes that don't cost the earth' sets out a vision for sustainable housing with policies and actions on the five themes emerging from the Greener Homes Summit: a National Retrofit Programme (NRP); the role of standards; financial market transformation; new build market transformation; and skills and training.

Profile of responses

2 There were 91 non-campaign responses to the consultation, 89 from groups and 2 from individuals. A campaign by WWF Scotland generated 358 responses, of which 21 varied substantially from the standard text and 37 included minor variations. One response was excluded as defamatory. Non-campaign responses were categorised as: the local authority sector; the RSL sector; the private sector; professionals; other group respondents; and individuals. There were 48 questions, some in two parts. Closed questions with a yes/no response were analysed quantitatively. The main focus of the analysis was qualitative, reflecting comments on both closed and open questions. An analytical framework was based on an initial review of the key themes and issues for each question. Response rates were fairly high, with many over 60% and particularly high rates for the sections on the National Retrofit Programme and the Role of Standards.

Results of the consultation

3 The majority of respondents (80%) supported the vision and objectives set out in Scotland's Sustainable Housing Strategy for warm, high quality, affordable, low carbon homes. Respondents raised a range of additional issues and commented on how the vision and objectives might best be achieved. Issues raised by respondents included a range of views on fuel poverty issues, on technical aspects of improvements to buildings, such as the need for good repair standards and appropriate ventilation, the scale of investment and funding needed at a time of limited resources and economic difficulties, the potential for adverse impact on the housing market if higher standards were enforced, and concerns about the likely effectiveness of the Green Deal and Energy Company Obligation (ECO), particularly for rural homes. (Q1)

A National Retrofit Programme

4 Several representative bodies volunteered broad support for the National Retrofit Programme (NRP). Respondents identified many barriers to home owners and landlords installing energy efficiency measures: costs and financing; consumer perceptions and behaviour; the 'hassle' involved in having work done, either as occupant or landlord; inadequate information; questionable benefits of measures or fears of technical problems; the physical nature of the stock; building condition issues; energy supply problems in areas off the gas grid; the confusing range of offers for energy efficiency improvements; the difficulties of improving mixed tenure blocks and common parts of buildings; uncertainties about advisors and contractors; the lack of incentives for private landlords with poor returns on investment in energy efficiency improvements; and limitations imposed in conservation areas and listed buildings. (Q2)

5 Various solutions were advocated including measures that the Scottish Government might undertake: continued support for the Energy Saving Scotland advice centres (ESSacs); financial incentives including council tax and LBTT rebates; grant support for vulnerable households; area-based improvement programmes to be led by local authorities over a number of years; promotional campaigns; and improved technical information and demonstration projects. Some questioned the viability of the Green Deal and ECO, including calls for a simpler funding model for Scottish retrofit and a simpler offer to consumers. There were particular concerns about traditional buildings and a need for guidance on hard-to-treat house types. Respondents suggested a range of measures for traditional construction types and the need for comprehensive advice to ensure that improvements achieve their objectives, such as ensuring adequate insulation before installing air source heat pumps. (Qs 3-4)

6 The key issues for improving energy efficiency in rural, remote or island areas were: the rural premium, with higher costs due to difficulties of access and low density; high energy costs in areas off the gas grid; the high proportion of hard-to-treat homes and the expense of solutions; and difficulties in accessing programmes of support, despite high rates of fuel poverty. Suggestions to address these issues included: additional funding, the design of schemes of support, business development support for local companies, technical guidance on solutions for hard-to-treat properties, and community energy generation. (Q5)

7 Almost all the local authority groups advocated a central role for local authorities in managing energy efficiency improvements across tenures, some suggesting a regional partnership, with a facilitating rather than delivery role. Few offered opinions on the funding options given in the consultation but there was concern about the challenge funding model. Only c.10% of respondents commented on the Homes for Scotland proposal for new build to contribute funding for the improvement of existing homes in lieu of higher building standards. (Q6)

8 The key role for Scottish Government was to maximise resources and provide funding for the National Retrofit Programme, including negotiation of Scotland's share of UK funding. It should also: set standards, design the programme, and take oversight of delivery; promote awareness and disseminate information about technical options, and support the collation of information to better identify need and track progress. Relatively few respondents commented on the role of devolution of additional powers; some identified tax powers and control of budgets as potentially most helpful to retrofit, particularly a reduced rate of Value Added Tax. (Qs 7-9)

9 Partnerships with trusted intermediaries such as health visitors, MacMillan nurses, community interest groups, WRVS, cultural groups, Age Scotland etc. were seen as key to ensuring that the NRP would maximise benefits to all consumers, including the most vulnerable. Funding was needed to support such intermediaries to promote the programme. Also, the local authority Care & Repair model could be expanded to cover Green Deal, and energy advice could be offered to single property private sector landlords. Access to independent surveyors, approved contractors, and handholding could allay the fears of vulnerable consumers. Clear communications were important and should include a public engagement campaign at community level. Vulnerable people should be prioritised within area-based schemes, and help should be extended to disabled people who were ineligible for Care and Repair. (Q10)

The role of standards

10 There was broad support (77%) for the Scottish Government to consider a mandatory condition standard, beyond the tolerable standard. However, many respondents, particularly the local authorities, were concerned about the practicalities of enforcement of such a standard, in addition to current requirements to enforce the tolerable standard and repairing standard. Enforcement in the owner occupied sector was likely to be problematic. Compliance for private rented housing might be linked to landlord registration. Some respondents were concerned about the possible impact on the supply of private rented housing and housing waiting lists. However, there was support for use of incentives at the point of sale, particularly a Land and Building Transaction Tax rebate related to a condition standard. (Q11)

11 There was strong support (70%) for the principle of a checklist for maintaining a quality home, with a range of suggestions for the content of the checklist and its wording. There was some uncertainty about how the checklist might be used. (Q12)

12 A majority (62%) supported the introduction of a local authority power to require owners to improve their properties, which had been suggested to support the achievement of the Scottish Housing Quality Standard (SHQS) in mixed tenure blocks and energy efficiency measures in common parts of buildings. There was cautious support from many, particularly RSLs, but objections from many of the local authorities, particularly about recovery of costs, available resources, and practicalities of enforcement. There was also concern about burdening low-income homeowners who may not be able to afford routine maintenance, let alone improvements. (Q13)

13 There was stronger support (73%) for a local authority power to enforce decisions taken by owners in multi-household blocks, albeit with concern about recovery of costs, and also for the optional power to issue maintenance orders on any property which has had a work notice (81%). There was also very strong support (87%) for streamlining the process for using maintenance orders, particularly amongst local authorities, and support (75%) for powers to issue work notices relating to amenity, safety, and security outwith Housing Renewal Areas (HRA), but it was thought they would be little used, given local authorities' lack of resources. There was strong support (82%) for powers to issue repayment charges for work on commercial properties that would enable work to be undertaken in mixed-use premises, despite concerns that owners of unoccupied commercial premises often could not be traced. (Qs 14-18)

14 Given the recent introduction of the Property Factors (Scotland) Act 2011, it was not thought necessary to make it easier to dismiss and replace property factors. Many respondents identified the need to address the lack of factoring in many properties, which posed a significant issue for maintenance. (Q19)

15 Respondents suggested ways to raise the priority given by owners to energy efficiency, including the provision of information about running costs at point of sale or renting, and an energy efficiency awareness raising campaign. Many proposed incentives for consumers to make improvements or to purchase new low energy / low carbon homes, in particular discounted council tax (most frequently mentioned) and rebates on the forthcoming Land and Buildings Transaction Tax. (Q20)

16 Opinion was divided about the introduction of minimum energy efficiency standards for private sector housing, although the majority (57%) supported them: many respondents expressed concerns about the potential impact on the housing market, about the practicalities of enforcement and the potential impact on hard-to-treat and rural properties. A common response was that incentives and promotional campaigns were preferred to regulation and that regulation should only be introduced if they fail. (Q21)

17 Just over half suggested improvements to Energy Performance Certificates (EPC), particularly the inclusion of likely running costs. Some suggested ways to raise the profile of EPCs. There was also some general criticism of EPCs and RdSAP (the Reduced data Standard Assessment Procedure, see glossary). It would appear however that most of the issues raised were covered by the revised EPC recommendations report, issued in October 2012, and requirements for the use of EPC ratings in property advertising, from January 2013. (Qs 22-24)

18 The option of using EPC ratings as the basis for an energy efficiency standard attracted most support, because it offered consistency with the format of standard proposed for the Energy Efficiency Standard for Social Housing, and thus for the application of the same standards across the social and private sectors. However, there was concern about the higher costs of achieving the standard in rural areas and, more generally, the potential impact on housing costs without increased recognised value. Advice on diversity issues was similar to that given in the NRP section. (Qs 25-28)

19 The trigger points for application of the standard most often suggested in addition to point of sale or rental were applications for building warrant or major building work, landlord registration, HMO licence application, and re-issue of EPCs. However a quarter of respondents thought that requirements should only be triggered at points of sale or rental, or disagreed with regulation. (Q29)

20 While 57% favoured an energy efficiency standard in the private sector, a larger majority of respondents (65%) supported sanctions on owners, although with many comments urging caution about the impact on the market and enforcement issues. A minority (46%) supported the sanction or obligation being passed on to buyers. Although 2015 was the date most often suggested for the timing of regulation, many more commended a cautious approach, taking account of progress with programmes soon to be introduced and the current economic climate. (Qs 30-33)

Financial market transformation

21 This section of the consultation explored the ability of the market to reflect and value energy efficiency. Respondents - particularly the mortgage lenders - discussed why the market may not reflect energy efficiency. Others argued that better information about the true costs and benefits of energy efficient homes and improved training for surveyors and lenders were key to ensuring that the market places an appropriate value on energy efficiency.

22 With regard to levers to support the achievement of the strategy, there was wide-ranging support for the variation of council tax and Land and Building Transaction Tax to reward energy efficiency, but concerns about various aspects of the Green Deal and doubts about equity release products. Concerns were expressed about impacts on the current fragile housing market. (Qs 34-37)

New build market transformation

23 The creation of sustainable neighbourhoods could be supported by the use of specialist multi-disciplinary teams and project managers, appropriate locations, on site renewable energy generation including microgeneration, excellent public transport linkages to avoid dependence on the private car, access to amenities, and long term management. Planning guidance and building standards were seen as having an important role. (Q38)

24 The consultation asked about challenges to new build transformation and possible solutions. Respondents identified issues including some uncertainties about the true additional cost of sustainability; the need for support for research and development (R&D); the threat to climate change goals posed by suggestions that higher building standards should be deferred; and the risk that poor workmanship would undermine the achievement of sustainability in the built product. (Q39)

25 Bringing innovative construction methods to market would require proof that products were sound and would hold their value. Respondents advocated life cycle analysis and proof of product demonstration projects, and the exchange of knowledge about completed projects in the UK and overseas; research and product accreditation, incentives to use modern methods of construction; regulatory standards; and property assurance schemes for new products. (Q40)

26 Many argued that if the Affordable Housing Supply Programme (AHSP) were to champion greener construction and technologies, increased funding would be needed to achieve higher standards of sustainability, particularly in rural areas, and longer term programming. (Q41)

27 Some counselled that in the current economic climate, only regulation could Influence builders to make greater use of innovative methods. There were calls for a centre of excellence to work with industry in Scotland, whilst the Council for Mortgage Lenders advised on the needs for recognised standards and warranties to give confidence to lenders about modern methods of construction (MMC). (Q42)

Skills and training

28 Less than half the respondents answered the section on skills and training. Many commented on the impact of the recession, loss of skills and capacity, and the need for investment to create demand and rebuild the skill base. There were already skills and capacity issues for many of the newer green technologies. The greatest challenge for both retrofit and new build was to fund the re-skilling and up-skilling of existing workers, from design through to build, as well as supporting new entrants in the 16-19 year old age group through Modern Apprenticeship programmes. There was considerable concern about reduced capacity in colleges, compounded by the regionalisation agenda in the post-16 review of vocational education. (Q43)

29 Firms need to understand which retrofit solutions would be accepted by Green Deal providers in order to know which products and systems to be trained in. There was a need for skills development in customer service and project planning, as well as trade skills. (Q44)

30 Several commented that industry was fully aware of training opportunities but because of market pressures which threaten the survival of businesses in the industry, staff were not offered the time they need away from revenue earning work to take up learning opportunities. (Q45)

31 Some respondents called for a culture change in the industry. Suggestions for ways to widen participation were focussed on Community Benefits in Public Procurement and initiatives led by local authorities with private and voluntary sector partners to increase the number of jobs, education, or training opportunities available to young people and equalities groups. (Qs 46,47)

32 A minority commented on the challenges to skills and training in remote and island areas. They proposed measures to boost access to training and secure employment – stimulating consumer demand to create predictable workloads, contracting local businesses, and different training modes including distance learning which would require suitable broadband access. Subsidy could allow rural learners to attend college for intensive training packages. (Q48)