Scotland's Sustainable Housing Strategy

5. New Build Market Transformation

The outcome we want to see:

Scottish companies maximise the potential of innovative design and construction techniques to deliver more, greener homes as part of sustainable neighbourhoods, creating export and other economic opportunities.

More than half a million extra homes are likely to be needed in Scotland to meet demand by 2035, according to National Records of Scotland projections ⁸ . 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 helps prevent fuel poverty.

5.1 Consultation position

Scotland's house-building industry already makes a significant contribution to Scotland's economic prosperity, creating and supporting jobs and enabling labour market mobility. And, as a consequence of our demanding building standards, the energy efficiency of the new homes built today has increased significantly in recent years. However, the Scottish Government believes that more can be done, both to improve further the sustainability of new build housing and to forge new economic opportunities from the sector and its supply chain, including the potential for a "first mover" advantage in the export market in Europe and beyond.

The Scottish Government's ambition for new homes that meet the highest sustainability standards represents a huge opportunity for innovation and investment in the housing sector building on the industry's existing track record. Further enhancement to the delivery of energy performance and carbon abatement through the building standards system will play a vital part in transforming the new build market.

The Scottish Government has a key role to play through the way we incentivise energy efficiency in the new homes that we subsidise. We estimate that the £860 million housing supply budget for the three-year period 2012-15 could generate around £3.5 billion of economic activity and support up to 10,000 jobs each year, directly and indirectly, across the Scottish economy. Through the Affordable Housing Supply Programme ( AHSP), we are committed to subsidising 30,000 new affordable homes over the 5 years of this Parliament, mainly through councils and housing associations. The programme includes homes for social rent, intermediate rent and shared equity. While some of these homes will be delivered though rehabilitation or off-the-shelf purchase, at least 80 % will be new build, and a coordinated approach to driving energy efficiency through this Programme can spearhead wider reforms in the industry.

5.2 Consultation responses

Many responses were heavily influenced by consideration of current economic conditions. It was argued that the current state of the construction industry makes it more difficult to contemplate innovation or speculative investment in training and skills development. It was also argued that both social landlords and builders need the security of long term funding programmes to develop cost-effective planning and procurement in both new build and retrofit.

However, the argument that the recession had limited new build market transformation was challenged by some respondents who cited a lack of evidence of innovative design and approaches in the 'boom' years up to 2008. Others noted that building to high standards of energy efficiency is well established in other countries.

Some respondents considered how the government could support new build market transformation. Suggestions included increased funding for the affordable housing supply programme to enable more sustainable housing, and support for research and development.

5.3 Actions

• We are consulting on new build standards for the 2014 building regulations
• We reconvened the Sullivan Report panel to advise on future enhancements to energy performance and carbon abatement through the Building Standards system.
• More than 330 new affordable homes will be built through the Greener Homes Innovation Scheme ( GHIS) promoting greener methods of construction in the house building industry and enabling families to save up to £1,000 per year on running costs.

• We will monitor and review GHIS which announced successful projects in March 2013 and update the Greener Homes Prospectus ⁹ (which showcases case studies and examples of the kind of work which can be done to improve energy efficiency in homes) so that it maintains a current status.

• We will continue to provide an extra £4,000 funding through the Affordable Housing Supply Programme ( AHSP) for every home meeting the 'silver' sustainability standard for emissions and energy use within section 7 (Sustainability) of building regulations. To encourage greater take-up, from 2013/14 this funding will be available as an addition to the mainstream resources available at council level.
• We will promote the ability of design and modern methods of construction to help meet future targets on energy use and carbon emissions. This was previously set out in our Architecture and Place Policy.
• We will consider the recommendations of the Review of Procurement in Construction following the publication of its findings in autumn 2013.
• We will ensure modern methods of construction are supported through skills development. This includes:
  • Delivering at least 25,000 Modern Apprenticeship starts in 2013/4. This is a demand led programme but in previous years there have been significant numbers of starts in the construction sector.
  • Maintaining our successful Low Carbon Skills Fund, delivering at least 500 training episodes to Scottish SMEs in 2013/14
  • Continuing to work with industry and relevant sector skills councils to develop demand led skills provision which meets current and future needs of employers.
• We will include Sustainability as a core theme in our National Planning Framework 3 and our Scottish Planning Policy, with consultations on both documents taking place. These documents will ensure that sustainability influences funding decisions over the next 30 years.