黑洞社区

This month鈥檚 autumn statement from Jeremy Hunt contained a welcome surprise for the green construction lobby. The chancellor announced that he would provide 拢6bn in funding for energy efficiency improvements to buildings for three years from 2025. At 拢2bn a year, it appears to be a significant step up from the 拢6.6bn already set aside for the course of this five-year parliament, which works out at around 拢1.3bn a year. 

Although Hunt did not spell out what the money would be spent on, the implication is that it will be for retrofitting existing buildings with insulation and clean energy upgrades, such as heat pumps. The chancellor also announced a new commitment to reduce the UK鈥檚 energy consumption from buildings and industry by 15% by 2030 compared with 2021 levels.

This was added to yesterday with another 拢1bn for insulating the least energy-efficient homes and those on lower council tax bands under a scheme set to launch next spring and run for three years. Business secretary Grant Shapps has also announced a new 拢18m campaign to provide public advice on how to reduce energy bills.

Campaigners and trade body leaders who are normally disappointed by default with what the government comes up with have been unusually happy with the offerings. They said it suggests that ministers are finally taking the energy consumption issue as seriously as energy generation.

But it was another announcement within the autumn statement that really seemed to catch the attention of industry leaders. Hunt said a new energy efficiency taskforce would be created and 鈥渃harged with delivering energy efficiency across the economy鈥�.

If the government gets that right, it could catalyse demand in the owner occupier sector because it could work to help people understand what it means to have their property retrofitted

Hannah Vickers, chief of staff, Mace

He did not give any further details, although it was reported by Bloomberg that this will drive the expansion of programmes to help people carry out retrofit works on their homes.

We do know that it will operate under the Department of Business, Energy and Industrial Strategy (BEIS), although when 黑洞社区 asked some very general questions about the taskforce 鈥� such as who would sit on it and what its remit would be 鈥� the department merely said that Shapps would 鈥渁nnounce further details in due course鈥�.

>> Also read: Industry welcomes 拢6bn funding for energy efficiency measures

Shrouded in mystery it may currently be, but that did not stop some of the industry鈥檚 key players singling it out as a potential game changer in the fight to reach the UK鈥檚 carbon emissions targets. Mace chief of staff Hannah Vickers, who also sits on the Construction Leadership Council鈥檚 (CLC) net zero carbon workstream, said it was the one announcement from Hunt that she was 鈥減articularly interested in鈥�.

She continued: 鈥淚t sounds really naff on paper, but it鈥檚 actually not. If the government gets that right, it could catalyse demand in the owner occupier sector because it could work to help people understand what it means to have their property retrofitted.鈥� 

Another supporter was UKGBC head of policy and public affairs Louise Hutchins, who argued that it could offer a chance to put in place a viable longer-term policy. 鈥淚f it really does bring together the insight from across industry 鈥� from academia, from civil society 鈥� we could really start to tackle the strategy that鈥檚 needed to get us from where we are now which is a piecemeal, unambitious approach,鈥� she said.

Neither Vickers nor Hutchins said they knew anything for sure about the taskforce, what its purpose would be or who would be on it.

So why all this enthusiasm when we know so little about it? That can partly be explained by what went wrong with the government鈥檚 previous attempts to tackle the issue of energy efficiency in buildings.

Few government initiatives provoke as much derision around the construction world as the disastrous green homes grant, the 拢1.5bn scheme for incentivising householders to invest in energy efficiency improvements that was scrapped in 2021 after less than 10% of the allocated funding had been spent. The programme, which was rolled out by the BEIS when the department was led by hapless former chancellor Kwasi Kwarteng, failed partly because ministers did not ensure there were enough trained installers who could do the work.

Federation of Master Builders chief executive Brian Berry says the scheme was flawed because of a lack of input from experts. 鈥淚f they had spoken to the industry at the beginning, they would have realised that there would not be enough people who were accredited 鈥� and it takes time to go through that accreditation process,鈥� says Berry. 鈥淚t鈥檚 an example of where policy is made without consulting all the right people and about how it would work in practice.鈥�

RIBA president Simon Allford said last week that the new taskforce 鈥渕ust learn from past failures and build a competent, skilled supply chain鈥�. So why were mistakes made?

鈥淚 think it was politically driven鈥�, says Russell Smith, managing director of retrofit consultant Parity Projects and founder of RetrofitWorks. 鈥淚 certainly wouldn鈥檛 blame the civil servants because I think they knew it was deployed too quickly and without enough consultation鈥�.

He says a taskforce could help the government to avoid repeating the same mistakes in future schemes.

>> Also read: Green homes grant had devastating consequences for the construction sector, MPs say

>> Also read: Green homes grant reboot must be long term for it to work, government told

But really tackling energy efficiency at a national scale and on a long-term basis is a complex challenge, requiring a number of systemic factors to be addressed at the same time. The UK has some of the leakiest homes in Europe, with 17 million out of 29 million buildings in the country needing to be made warmer.

Around 450,000 skilled tradespeople will be required to carry out the work over the next two decades, according to the CLC. This comes when the industry is facing a major skills shortage, and when safety standards are being tightened through the 黑洞社区 Safety Bill.

And now we have the government鈥檚 new energy efficiency target, meaning much of this work will need to be carried out within the next seven years. All of this calls for 鈥渟ubstantial changes to the way we operate鈥�, Smith says. 鈥淚t鈥檚 go big or go home time.鈥�

So how should the taskforce advise the government to spend the newly pledged 拢6bn? Jamie Abbott is director at Turner & Townsend and leads the consultant鈥檚 team working on the BEIS social housing retrofit accelerator, an intiative helping the social housing sector bid for an 拢800m government funding pot for retrofit works. He says the current market needs a 鈥渞adical boost鈥� in skills capacity. If he were on the taskforce, he would advise ministers to spend a large chunk of the money on working with further education colleges to develop a curriculum so people can be trained to the latest standards. 

鈥淲e need people coming out of colleges to understand these types of technologies and technical challenges as a matter of standard practice and then we need the existing workforce to be aware of the opportunities coming through government investment as well as an uptick of private sector investment,鈥� Abbott says. 

鈥淚 think it鈥檚 about relationships and linking up with those colleges and making it institutionalised, making this business as usual.鈥�

Abbott, who also leads Turner & Townsend鈥檚 50-strong housing sustainability team, says the challenge for the taskforce is how to create the supply to achieve the level of insulation measures at the scale and pace required to meet the 2030 target.

Smith agrees that the priority for the government needs to be on skills if it wants to avoid another disaster like the green homes grant. 鈥淯nless there鈥檚 some serious changes to the way that colleges deliver 鈥� the way we incentivise people to get into this industry, educating people that are in school right now and who will be this workforce in five or six years time 鈥� we鈥檝e got absolutely no chance of doing anything at all,鈥� he says.

He would tell ministers to immediately spend half the money on growing the workforce, and the other half on financial incentives for owner-occupiers and people on low incomes.

According to David Pinder, chair of clean energy specialist Mixergy and a member of the CLC鈥檚 net zero team alongside Vickers, there is a major policy gap in the government鈥檚 approach to homeowners. He says the generation of private sector demand is crucial, requiring a coordinated campaign to explain the benefits of paying for the work. 

The social housing decarbonisation fund, which entered its evaluation phase last week and will now start the process of allocating grants, offers housing providers a 50% match for the costs. Extending the same measures to the private sector is almost certainly off the table, given the number of homes that will need to be upgraded.

鈥淚t鈥檚 much more challenging to address the 鈥榓ble to pay鈥� market and we鈥檇 be keen to see more details on how this could be addressed in terms of government support,鈥� Abbott says. Persuading people to invest huge sums of money on retrofit works in the middle of a cost-of-living crisis is asking a lot. But he says he has seen a huge uptick in demand within the private sector, at least more than there is supply.

Much of the work revolves around creating a market where financiers feel safe to invest, which ideally would scale up the sector and bring costs down. Smith says he speaks to a lot of finance providers who are 鈥渄esperate鈥� to lend into the retrofit space because they know that there is a latent market there which they can support. 

鈥淭he government needs to be spending that money on the infrastructure to get the industry moving. Householders will spend their own money, finance providers will come up with really interesting ways of mobilising householders and industry to invest. But without the confidence that there is a structure around which the industry could work, nothing is going to happen,鈥� he says.

The real positive is that it is on the government鈥檚 agenda, the chancellor was talking about energy efficiency

Brian Berry, Federation of Master Builders

It is too early to tell if the taskforce will be anything more meaningful than initiatives that have gone before. The government set up a repair, maintenance and improvement (RMI) taskforce a few years ago, which Smith says produced a 鈥渘ice report but no real action鈥�.

There was also a net zero building council which 鈥渕et twice and all they discussed was what they should discuss鈥�, he says. 鈥淚t consisted of seriously weighty people whose time was completely wasted. The government鈥檚 track record on taskforces is dreadful.鈥�

But the announcement in Hunt鈥檚 much anticipated House of Commons statement 鈥� a major fiscal event that was watched closely by the national media 鈥� feels like something with a bit more to it. 鈥淭he real positive is that it is on the government鈥檚 agenda, the chancellor was talking about energy efficiency,鈥� said the FMB鈥檚 Berry.

Nobody considers the 拢6bn funding from 2025 will be nearly enough, but Russia鈥檚 invasion of Ukraine and the resulting energy bills crisis appears at least to have spurred the government into some kind of action. So what would make it work?

鈥淎 clear sense of purpose, a definition of what it is seeking to do,鈥� says Berry. In which case, we can but hope that previous lessons have been learnt and that clarity will soon follow 鈥� and that this time it really is worth the industry getting enthusiastic about the prospect of real progress.