Sureserve Roundtable

Overview

Sureserve recently hosted a roundtable event focussing on Local Government led retrofit. Guests included Oliver Coppard, Mayor of South Yorkshire, Selvin Brown Director of net zero homes at the Department of Energy Security and Net Zero, plus retrofit industry stakeholders from Local Authorities, Housing Associations, think tanks, NGOs, and membership bodies.

The roundtable discussion highlighted several critical topics, including retrofit finance models, local government delivery capacity, resident engagement, health, and green skills. This article delves into these themes, offering insights into the future of housing retrofit through a lens of local government delivery.

Financing Retrofit

The Warm Homes Plan will aim to provide political leadership and guidance for retrofit, but it will almost certainly fall short of the financial support needed to meet the government's 2030 EPC C and 2050 net zero targets. Participants agreed that private investment will play a crucial role in funding future retrofit programmes. However, unlocking significant capital requires a stable policy framework and cross-party political consensus to instil confidence in private investors.

A key challenge in securing private finance is the lengthy period required to recoup costs from retrofit measures. The savings from retrofit often do not match the installation costs, especially over a 10-15-year financing period. This makes standard 25-year mortgages unsuitable for funding retrofit measures. Institutional investors with a longer investment horizon of 30-50 years could be a viable alternative.

Presenting a robust business case for retrofit remains challenging. With two-thirds of housing privately owned and retrofit costs running into tens of thousands of pounds, there is little incentive for private landlords to invest in retrofit. Therefore, the Treasury must play a larger role in bridging the financing gaps.

Greater devolution, allowing councils to retain more of the money they generate, could reduce waste and enable local authorities to reinvest in housing initiatives. This approach would allow local authorities to address housing, health, and environmental concerns simultaneously.

Capacity Challenges and Devolution

The government seems to view devolution as essential for delivering retrofit schemes. Learning from the West Midlands Combined Authority (WMCA) and Greater Manchester Combined Authority (GMCA) will be crucial as more local authorities receive devolved funding settlements. This shift will require substantial resources to move from Whitehall to local authorities.

Austerity measures over the past decade and a half have eroded local authorities' capacity, creating disparities across regions. Many local authorities face significant challenges and capacity limitations. In housing teams, local officials often have retrofit as only part of a wider remit, making it difficult to champion retrofit internally or engage with its technical aspects. Without additional support, local authorities with limited capacity risk missing out on the benefits of the Warm Homes Plan.

A national drive to boost skills and the local government workforce is needed. This includes greater collaboration across government levels and between local authorities to ensure efficient resource and skill allocation. However, even with strategic resource redistribution and increased funding, the necessary skills to support retrofit programmes may be lacking in the labor market. More incentives and training are required to ensure local authorities have access to the workforce needed to deliver retrofit effectively.

Place-Based Retrofit

To meet government targets, retrofit measures must be delivered at a greater scale. A place-based approach, delivering retrofit across a mix of tenures to whole neighbourhoods and communities, is one way to achieve this. The Local Authority Retrofit Accelerator (LARA) is promoting place-based retrofit across various tenures. Expanding such programmes geographically and increasing their funding could establish a strong basis for scaling retrofit via a place-based approach. Focusing first on social housing as a catalyst will help build capacity and the supply chain.

Health and a People-Focused Project

Comfort and health should be central to all retrofit considerations. There have been instances where retrofitting led to worse health outcomes due to unresolved ventilation issues. This was partly because residents were not adequately consulted or informed about ventilation systems. Retrofit should be viewed not only as a building and planning project but also as a "people project" with healthy homes at its core.

Current national standards mean that new homes still require retrofit to improve comfort and health outcomes for their occupants. The government must swiftly reform Energy Performance Certificate (EPC) ratings and building standards, including the Future Homes Standard. Participants indicated that houses built to current standards are developing damp and mould, necessitating further works to remediate issues and improve thermal comfort.

Engagement and Community Connectivity

Communities should be involved in diagnosing problems in their neighbourhoods and designing solutions. This approach will likely lead to better outcomes and help build trust. Greater engagement with community groups rooted in local areas can facilitate better resident engagement. Allowing local people to contribute to retrofit programmes would build connectivity and provide a network to articulate retrofit benefits to residents. Citizen assemblies, despite their significant cost, could be an effective tool for this purpose.