Just transition for the built environment and construction sector: a discussion paper

Annex: Policy Context

A range of policy interventions are already being implemented across the buildings and construction sector to reduce emissions and support a just transition. This document gives an overview of key policies currently being implemented with regard to:

A. energy efficiency of our buildings;

B. the construction sector

Energy Efficiency

We have committed to investing at least £1.8 billion over the course of this Parliament towards heat and energy efficiency measures and to support those least able to pay.

The Heat in Buildings Strategy outlines a range of delivery schemes supporting heat decarbonisation and energy efficiency.

Domestic support:

• Home Energy Scotland Advice Service – provides free independent advice on energy efficiency and low/zero emission heating.

  In 2022 – 2023 we expanded the Home Energy Scotland (HES) advice service by 20%. With this expanded capacity, HES supported 138,000 households in 2022-23 - an increase of around 21,500 on 2021-22.

  Of these, 71,000 households supported were vulnerable to fuel poverty, which is an increase of 79% on the previous year.

  HES also provided vital signposting to crisis funding to around 11,000 people in need and have further developed partnership referrals with organisations such as Macmillan Cancer Support.

• Home Energy Scotland Grant and Loan - Households can now access Home Energy Scotland grants of up to £7,500 for heat pumps and £7,500 at a grant rate of 75% for energy efficiency measures.
• This grant offer includes a rural uplift of £1,500 to both the heat pump and energy efficiency grants, increasing grants in these areas to a maximum of £9,000.
• Warmer Homes Scotland – Is the Scottish Government’s national fuel poverty scheme, designed to make homes warmer for those living in, or at risk of fuel poverty through installing insulation and heating measures in individual properties.
• More than £220 million has been invested through the scheme since its launch in September 2015 helping over 33,000 households throughout Scotland.

  We are relaunching the Warmer Homes Scotland scheme from October with more funding and more help for households to install a climate-friendly heating system and take a whole-house retrofit approach.

• Area Based Schemes (ABS) – Provide energy efficiency improvements to households in or at risk of fuel poverty living in own or rented property. This is delivered via local authorities through the £64m local authority-led Area Based Schemes.

Business Support:

• Business Energy Scotland – In 2022-23 we launched our refreshed non-domestic advice and support offering with the new Business Energy Scotland service. Provides free advice & support to Scottish SMEs to help improve energy efficiency and decarbonise heating in their premises. Business Energy Scotland supported over 9,000 enquiries from SMEs ins 2022-23, providing in-depth advice to over 1000 SMEs, and identifying cost savings of over £10M with implemented projects saving over 13,000 tonnes of lifetime Carbon emissions.
• SME Loan & Cashback Scheme– Provides interest free loans from £1000 up to £100,000 and cashback grants of up to £30,000 for the implementation of energy efficiency and renewable energy technologies. In total a Scottish based SME can access a maximum of £130,000 through the scheme.

Communities & Public sector:

CARES (Community & Renewable Energy scheme) – Advice and funding support for community groups and other relevant groups seeking to explore renewable energy options. Delivered by local energy savings trust.

Public Sector Non-Domestic Energy Efficiency Framework -Energy performance contract framework designed for larger public sector projects. Improvement measures financed through savings.

Social Housing:

Investing £200m into Social Housing Net Zero Heat Fund

£200m Scottish Green Public Sector Estate Scheme, supporting leadership for energy efficiency and heat decarbonisation right across the public sector.

Supply chain:

The Sustainable Energy Supply Chain programme is funded by the Scottish Government and administered by Energy Saving Trust.

Since 2013 it has provided support and assistance for businesses in Scotland to help them participate fully and effectively in the supply chain for energy efficiency and micro-generation measures and installations.

Construction

This section lays out the key policy commitments we are taking forwards for the construction sector that contribute to the decarbonisation of our current and future building stock.

Construction Leadership Forum

• The Scottish Construction Leadership Forum is the main forum for Scottish Government and Industry interaction.
• The CLF Recovery Plan delivered the Construction Pipeline Forecast Tool in July 2021 developed by Scottish Futures Trust. The tool gives visibility to more than 1,700 future infrastructure projects that have been submitted by just under 50 Scottish public bodies, with a total value of £12.2 billion. Over 900 businesses have now registered for updates.
• An industry data dashboard focused on Scotland's construction industry launched in May 2022, enabling open access to data to help all industry stakeholders make better-informed decisions.
• Built Environment Workforce Development Portal (skills directory) launched in May 2022 providing detailed guide to courses and training for individuals and companies focused on Scotland's construction industry.

The Construction Accord

• The Accord is a shared vision for the industry and the public sector including key principles such as fair work, diversity and inclusion. It is a set of values and principal aims for the future development and transformation of the construction industry as an integral and vibrant part of the Scottish economy.
• Developed by the Construction Leadership Forum, it seeks to improve outcomes for the businesses and workforce which make up the construction and associated industries and from the industry for its clients, the economy, wider society and the environment.

Construction Accord Outcomes:

For Businesses & the Economy:

• We have successful, commercially sustainable and profitable construction and related businesses which are anchored in Scotland, forming local supply chains.
• Our construction sector businesses are incentivised to innovate and invest in people to grow local economic benefit and create export opportunities.
• We are a productive industry contributing to inclusive economic and green growth.
• We are a digitally enabled industry, confident and skilled in using modern methods of construction.

For Current & Future Workforce:

• We provide high quality and fair work for everybody working in the sector and look after their physical and mental health, safety and wellbeing.
• We have a diverse workforce and pipeline of talent with capacity and competency fit for current and future industry needs.
• Our sector is attractive to a diverse range of new entrants to the workforce.

For Customers & Users:

• We maintain high standards of design to enhance Scotland's places, delivering works, products and services that are regulatory and specification compliant, and which maximise whole life-cycle value for money.
• We have a sustainable quality culture fit for a safety-critical industry.

For the Environment & Communities:

• We are on a just transition pathway to being net zero in embodied carbon, industry operations and over the life cycles of the assets we create, enhance, repair, and manage.
• We use natural resources sustainably and are a key part of a circular economy.
• We are fully engaged with and contribute value to the communities in which we operate

National Construction Equity and Inclusion Plan (NCEIP)

• The National Construction Equity and Inclusion Plan (NCEIP) was developed by the Construction Leadership Forum in 2022 and published on 27 September 2022. Its purpose is to drive towards greater inclusivity and equality in the sector in line with Scottish Government's National Strategy for Economic Transformation (NSET).
• Culture was amongst a number of key themes identified from the research, workshops, and business discussions as important to the construction sector in Scotland.
• The key areas of focus included: Culture; Education and Training; Recruitment; Retention; Promotion; Employee Engagement/Communications; Data and Evidence; Corporate Strategy; Leadership; Shareholders/Stakeholders; and Sustainability.
• The NCEIP identifies six specific strategic objectives, each with specific, measurable, achievable actions and associated timescales. They are
• Leadership Culture and Image
• Compliance and Knowledge Transfer
• Data and Evidence
• Education and Training
• Recruitment, Retention and Promotion
• Employee Engagement and Communication
• Implementation of the NCEIP will now be taken up by the members and sub-groups of the Construction Leadership Forum as part of the industry transformation Plan.