Recently our focus has been on the WMCA. It has ambitious plans for retrofit in its Five Year Plan. But they won’t get off the ground because there is hardly any money to pay for them. This is the result of two factors. One is the lack of investment by the private sector because they don’t see enough profit in it. The other is the shambles of the grant funds for householders – the grants aren’t big enough, there aren’t enough of them, and there is no effective community publicity campaign explaining retrofit and how to get funding.
It’s time the WMCA stopped pretending. Only a huge increase in Government funding will get retrofit done. And only a mass campaign of public pressure will force Government to pay up.
But the vast majority of retrofit in the West Midlands is the responsibility of each of the 7 local authorities, not the WMCA. They all need a massive increase in Government funding if they are to get retrofit done in time.
We’ll take the example of Birmingham, but it would be very useful to know what discussions are taking place in the other WM Councils.
The Birmingham Council Cabinet meeting on the 13th of December approved its 48 page ‘Housing Strategy 2022-2027’. ‘Priority 3’ includes a commitment to “Secure investment to fully retrofit 30% of BCC stock over the next five years.” (p6).
“BCC stock” is about 60,000 social homes. 30% of these amounts to about 18,000 homes. To retrofit these over the next five years would require retrofitting on average 3,600 homes a year. That’s about 10 homes every day, starting now. But they haven’t even started yet. And how much will it cost?
“The cost of addressing the entirety of Birmingham’s 60,000 homes, without even looking into other tenure types, has been estimated to be more than £3.6bn over 30 years. Sourcing the funds and planning to address this is a significant challenge for the city and it is imperative that we capitalise on grant funding opportunities.”
“The council’s existing budgets are already committed to delivering frontline services. There is limited funding available, hence a creative financial solution is required that ensures costs and benefits are spread equitably.” (p35)
And the aim is retrofitting all types of homes, not just social housing:
“The road to zero is a key commitment for the council and housing must play a part in making sure the council’s aspirations are met; the aspiration for the city to hit net zero carbon by 2030 has accelerated the need to retrofit homes across all tenures.” (p9).
In 2017 (the most recent data) there were about 435,000 homes in Birmingham. The 60,000 social housing represents about 14%. That leaves 86% in private ownership – about 375,000. The vast majority of these will need retrofitting, especially the large number which are older properties. If the aim is still the 12 years till 2030, and if 300,000 need retrofit, that’s an average of 500 a week for the next 12 years.
Where will the funding come from?
The UK Green Building Council (UKGBC), an industry network, published in October a 26 page report, the ‘UKGBC Response to Net Zero Review: Call for evidence’, which is very critical of Government policy. “Current rates of renovation will need to increase by around 7 times if we are to meet the Government’s target of upgrading as many homes to EPC Band C as possible by 2035.” The report concludes:
“It is critical that Government therefore introduce and support a large-scale, transformative domestic retrofit strategy and programme that is fully coordinated with local authorities, industry, consumers and other relevant stakeholders, and does not disadvantage lower-income households.”
They are right. Retrofit requires far more money, for two purposes. One is to greatly increase the number of grants available to home owners (and greatly simplify the procedure). The other is to greatly increase the funding for local government to spend on retrofit. This could be used to create market opportunities which would attract large-scale private investment into large-scale neighbourhood retrofit projects, which is what we need.
Grants for residents
At Birmingham Council’s Sustainability & Transport Overview and Scrutiny Committee on 19 October 2022 Cllr Majid Mahmood, the Cabinet Member for Environment, explained:
“City housing is currently supporting the delivery of the Energy Companies Obligation 4 (ECO) and LADS. ECO is a government energy efficiency scheme for Great Britain, administered by Ofgem, with the objective of improving the least energy efficient housing stock occupied by low income and vulnerable households and LADS is the Local Authority.”
But these grants have come to an end. What grants will be available in 2023? Phil Beardmore is a Birmingham-based expert. He says on his website ‘Energy Confidence’ that Eco Plus grants will be available from April 2023. Homes with Energy Performance Ratings of D or below, and homes with Council Tax bands of A-D, will qualify. Household income or savings will not be taken into account. So far it looks as if the following measures will qualify: loft insulation, cavity wall insulation, smart heating controls, room-in-roof insulation, and probably under-floor insulation, internal wall insulation, external wall insulation, and ventilation. Unlikely to qualify are windows and doors, unless replacing single-glazed, and gas boilers. Heat pumps are partly funded by grants elsewhere (the boiler upgrade scheme) and so they won’t qualify for Eco Plus.
Phil Beardmore thinks that the maximum grant will be £15,000 per home, but he doesn’t expect that everyone will get the full amount, and a householder contribution will be required. He will put on a webinar (pay-as-you-feel) in March or April to give people impartial advice about the grant scheme (details will be on his website).
But what the Government hasn’t announced is how many grants will be made available. Will they be more than a small fraction of the funding needed to get retrofit done for everyone?
Attracting private investment in retrofit
The most ambitious attempt to do this in the West Midlands is the 3 Cities programme. ‘Retrofit – The 3 Cities’ is the title of a new joint initiative by the city councils of Birmingham, Coventry and Wolverhampton. It was publicly launched last summer.
“The 3 Cities Retrofit is an initiative to develop an integrated retrofit programme across the cities and one which reflects the diversity of needs and housing portfolios of each city.”
Its aim is to attract private investment in the retrofit of homes. (Ideally we might prefer retrofit to be carried out by local authority direct labour organisations and by non-profit organisations, but the need is far too great and too urgent. Only the private sector has the capacity.) Here are some quotes from its publication ‘Retrofit – The 3 Cities’ (https://the3cities.co.uk/retrofit), beginning with the size of the task:
“c.700,000 homes in the cities
81,887 3 Cities council owned housing stock
83,259 3 Cities Registered Providers’ owned stock
535,455 Privately owned housing stock across the cities”
“The scale – potentially some 700,000 homes and of the 165,000 social homes across the cities – combined with regional and city expertise and the collaborative approach of our pooled assets, means the 3 Cities are in an advantageous position to accelerate and drive forward the decarbonisation of homes.’ ‘The first focus for the 3 Cities is accelerating retrofit activities across social homes.”
The aim is to attract private investment: “Through our collaborative and integrated approach, the 3 Cities offers a single entry point for partners and investors to co-shape this at-scale initiative.” There is a detailed presentation in the 34 page ‘3 Cities Prospectus’ (https://the3cities.co.uk/downloads/file/1/prospectus?fileID=1). Here are some extracts:
“Retrofit presents a market making opportunity. The time to invest is now
WE INVITE YOU TO BE PART OF THIS SUCCESS
There has never been a more exciting time to invest in our cities. With an estimated £10-12bn worth of retrofit opportunities, there are many ways to get involved.”
“We are seeking partners to co-shape and co-develop the models required for at-scale retrofit delivery.”
“The first focus for the 3 Cities is accelerating retrofit activities across social homes.”
“Through our collaborative and integrated approach, the 3 Cities offers a single entry point for partners and investors to co-shape this at-scale initiative.”
“Achieving our ambitions will require a blend of funding and financing models
1. Capital Investment
2. Loans and Bonds
• Government-backed loans and bonds offer relatively low-cost finance for delivery of capital projects
3. Grant Funding
Central Government will play a vital role in allocating funding and encouraging retrofit delivery at scale through incentivisation and policy alignment
• Through conducting full housing stock, EPC data and community energy use assessments, we can ensure we are ready to capitalise on funding as it becomes available”
But this requires large-scale pump-priming funding by Government to persuade the market to invest. It needs mass pressure to force the Government to do this. We need public campaigns by all the local authorities in the West Midlands, together with the WMCA, to demand a huge increase in Government funding for retrofit. Such a campaign would get huge public support. So why won’t the hundreds of elected local councillors speak out and build such a campaign?
It’s not surprising that Mayor Andy Street, won’t do it. What about the Tory-led local authorities in the West Midlands – Dudley, Solihull, Walsall. Will any of them put their residents’ interests before their party loyalty?
And what about Labour councillors? They’ll criticise the Government, but that doesn’t change Government policy. Hopefully they are giving advice and support as best they can to their fuel-poor constituents in cold homes. That’s vital, but it doesn’t solve the problem. Unless they accompany this with organising a public campaign to demand Government funding they are saying to them in effect “you’ll just have to cope as best you can until there’s a Labour government”.
There is a retrofit crisis in the West Midlands because of Government failure to fund it. We can predict now that Birmingham Council’s retrofit policy will fail – it needs far more money and a huge programme of large-scale local projects. The same applies to all the local authorities in the West Midlands. Only mass public pressure can change it, and that also means building mass public pressure on the WMCA and on the Labour Party and its councillors in the West Midlands to forcefully play their part in building a mass popular movement in the communities and the trade unions for enough Government funding to get retrofit done with no more delay.
Richard Hatcher 29 December
Birmingham Against The Cuts 