Retrofitting homes in Birmingham: business models, jobs and skills

Whole-house retrofit – making homes as low carbon as possible – is a priority for tackling the climate emergency because nearly 15% of the UK’s total emissions come from providing heating and hot water to homes – about 80% of all the energy used in homes.

Across the UK, nearly 19 million homes are below the Energy Performance Certificate rating of C – the band at which homes are considered reasonably eco-friendly – and are therefore in need of an upgrade. Carrying out deep retrofit to homes can reduce their carbon emissions by over 90%.

But the scale of this challenge is huge. One estimate is that between 2020 and 2050 it would need one home retrofit every 35 seconds, and we’re already falling way behind.

Retrofit should be a key pillar of a transformative Green New Deal. This is a huge opportunity to create lots of low carbon work; we could create 455,000 full-time jobs for construction trades alone, more than three million jobs in other sectors aiding the transition to a green economy, and boost national income by up to £36bn.

Overall, upgrading the nation’s homes is estimated to require an average of around £19 billion annual investment from 2022 to 2050. This is equivalent to 2.2% of total annual Government spending in the 2018-19 financial year. But the improvements will also pay for themselves economically over time.

Of the dwellings in England, 64% are owner occupied, 19% private rented, local authority 7% and housing association 10%. Council-led retrofit focuses on social housing both because it’s easier because homes are more uniform and because occupants tend to be less well-off.

What Birmingham Council is planning

Birmingham City Council announced its plans for homes to make them as near to zero-carbon as possible at the City Council meeting on 11 January 2022.  The Route to Zero – Annual Progress Report – go to Appendix 1 for the 50 page report. Here are some key extracts. [Ref 1]

8 Housing Retrofit 

8.2 Work is underway to progress an Energiesprong [‘Energy Leap’] retrofit pilot which will initially retrofit 300 homes with a view to being able to scale this up across the city’s own stock. Energiesprong is a revolutionary, whole house refurbishment and new build standard and funding approach. This will form part of a Net Zero Neighbourhood for East Birmingham. [See Ref 2 for an explanation of Energiesprong]

16 Next Steps 

16.3 The priority projects listed below can be scaled up to deliver a greater level of carbon reduction and demonstrate an investment-ready approach. These projects [include]:

  • Delivering whole house retrofits in social housing, using a self-funding approach.

  • Creating a Net Zero Neighbourhood at Bromford and Castle Vale

  • Delivering larger and better district heat network(s)

Chapter 4 – Retrofit (p17+)

Headline achievements in 2021

  • The Council signed agreements with energy companies to make at least 451 homes more energy efficient, with an expected 1,000 homes by March 2022.
  • Driven forward a partnership in East Birmingham to develop a Net Zero Neighbourhood as a demonstrator for a place based approach to carbon reduction and investment.

The retrofit of 60,000 homes over 30 years equates to 2,000 properties per year every year (40 homes every week).

October 2021 update

This project has not yet started as is dependent on the Thermal Impact / Energy Efficient

Survey project above which has not been completed.

4.3 Large Panel Block (LPS) Retrofit and Ground Source Heating (GSH) Pilot and heating option available

October 2021 update

Jordan House is the trial LPS [tower] block [Hodge Hill]. The independent structural report … is still awaited. Preliminary preparation work at Jordan House is complete.

The Council’s retrofit plans for privately owned homes

The plan is for the 60,000 Council homes over 30 years – by 2050. But overall there were 434,190 homes in Birmingham in 2017. Council homes are about 13%. That leaves 87% of homes, a large percentage of which will have a low energy efficiency rating. This is what the Council’s report says about them:

Green Homes Grant

Residents and landlords are able to access grants for the cost of installing energy efficiency measures in their homes, helping to cut bills and reduce their environmental footprint.

To be eligible for the grant of up to £10,000, applicants should have a gross annual household income of less than £30,000 and be living in homes with a low energy efficiency rating (EPC band E, F or G).

4.4 Phase 2 Green Homes LADs funding [Local Authority Delivery]

October 2021 update

City housing colleagues are considering match funding via the housing revenue account and a change request was put forward to Midlands Energy Hub (MEH) to adjust the focus to more private housing. This is aligned to resident engagement from the initial open day at Perry Barr where there was proportionately more interest from owner occupiers – this change request was approved. MEH have approved BCC’s proposal and are confirming funding.

Mobilisation has started in the three Constituency areas identified for Phase 1: Perry Barr, Hall Green and Yardley. These have the worst EPC rated properties with the highest level of fuel poverty

4.7 East Birmingham Heat Taskforce – produce retrofit and decarbonisation Outline Business Case

The East Birmingham programme is currently mobilising, and the team is expected to be fully established in early 2022. Currently within the programme are two phases of projects: Phase 1 (8 projects) which is currently underway, and Phase 2 (17 projects) which is in development.

The programme team are currently working in collaboration with the R20 colleagues on three main elements:

  • East Birmingham Community Heat Taskforce: continuing the work with stakeholders to establish East Birmingham as a Low Carbon Heating Innovation Zone, including supporting the Cadent Foundation supported Community Learning Platform for Community Heat.
  • Net Zero Neighbourhood: developing the Bromford, Firs and Castle Vale housing areas as a demonstrator for a place-based approach to carbon reduction and investment. This includes the location of the Whole House Retrofit pilot.
  • Tyseley Clean Energy Masterplan for Growth: The Council and Tyseley Energy Park stakeholders are involved in the development of a Clean Energy Growth Masterplan for Tyseley which will combine spatial planning with strategies for power heating, transport and waste processing.

The Council has just appointed a new climate team of 15 senior staff led by Ellie Horwitch-Smith, Assistant Director Route to Net Zero.

The Report says that “There will be continuous engagement with stakeholders, ensuring that the community play a key part in shaping the programme and the projects within it.”

What will be the Council’s business model for its retrofit programme?

Birmingham, like almost all other local authorities, hasn’t got its retrofit programme under way yet. Its business model hasn’t yet been made public, but roughly speaking there are 3 options. [Ref 3]

  1. Municipal contract to commercial company

 The simplest way for the City Council to run its retrofit programme would be as a straightforward commercial operation, with a contract to a private sector construction company or companies. Energiesprong is an industrialised system which is Birmingham’s choice for its pilot project design. It is ideal for identical social housing.

Many local authorities already have big commecial contracts, not for retrofit but for heat network infrastructure and supply projects, providing affordable heat for council tenants (for example Aberdeen and Islington) or cost and carbon saving for commercial and public buildings (for example Gateshead and Manchester).

Arguably the policy development with most direct significance is … in heat networks. The UK Government established funding for district heating planning through the (England and Wales) Heat Networks Delivery Unit in 2013. To date [2018] 140 LAs have accessed funding and expertise to bring forward 200 potential projects…. The £320m Heat Networks Investment Project (HNIP), announced in 2016, provides the financial foundations…. This decentralised energy fund far exceeds previous programmes, with potentially significant deployment of low carbon heat network infrastructure in England and Wales, sponsored by LAs. This sets up the opportunity to provide a more consistency policy framework for district heating development, overcoming previously ‘stop-start’ programmes which have undermined progress…. [Ref 4]

Birmingham has a district energy network, in fact three, but they serve corporate buildings in the city centre. The Birmingham District Energy Scheme (BDES) provides three district energy networks for low-carbon heat, cooling and power to users under a contract from Birmingham City Council. It supplies Council buildings, Aston University, Birmingham New Street Station, the International Convention Centre, Barclaycard Arena, Library of Birmingham,  and the Birmingham Children͛s Hospital, 2 residential multi-storey blocks, and a department store. BDES is built, owned and operated by ENGIE, a global energy company which employs 170,000 people. [Ref 5] The urgent task now is to build new district energy networks in residential areas of the city.

Birmingham Council could simply apply the same business model to its retrofit programme and contract it out to private for-profit companies – but for retrofit there are other and better alternatives..

  1. Municipal partnership with third sector non profit organisation

A number of local authorities have contracts with local third sector energy service businesses with various forms of enterprise ownership, including community interest companies, industrial and provident societies, community benefit societies, and companies limited by guarantee, all with a close relationship with the local authority. These include both small and larger scale building fabric upgrades, new heating infrastructure, and local retrofit supply chains. Here are some examples:

‘In contrast to the municipal district energy company model, local third sector businesses provided more diverse retrofit. This spanned both small and larger scale building fabric upgrades, new heating infrastructure, and local retrofit supply chains. Two businesses were established as energy services organisations (Aberdeen Heat and Power (AHP), YES Energy Solutions (YES)) but delivered different services; three (Low Carbon Hub, Plymouth Energy Community, Bath and West Community Energy) were cooperative enterprises focused primarily on solar PV and securing long-term income. These also incorporated some fabric efficiency retrofit. Illustrating the flexibility of this model, of the latter group of energy cooperatives, Plymouth Energy Community, a social enterprise established by Plymouth City Council in 2013, is in the early stages of developing a subsidiary to focus on community-led zero carbon housing.’ [Ref 6]

(Note: CICs are not necessarily non-profit. They can deliver returns to investors, and can also pay large salaries.)

  1. Municipal direct labour organisation

 There are two examples of local authorities setting up their own Municipal energy utilities. Robin Hood Energy (Nottingham City Council) and Bristol Energy (Bristol City Council) were established in 2015 with the council as sole shareholder. They were licenced retail companies serving domestic and non-domestic customers across the British retail gas and electricity market. However, in 2020 both councils decided to sell the respective utilities, citing financial difficulties and leaving large debts.

But retrofit is very different from direct energy supply and much more manageable. Councils could contract out the majority of their retrofit but also set up an initial small municipal in-house non-profit retrofit organisations and then gradually expand it. This would increasingly save money on paying for private company profits and provide proper democratic participation and control.

It is exactly what was promised by ‘Building a Better Birmingham: Labour’s Local Manifesto 2018-2022’:

‘We will re-state the case for the municipal provision of services in Birmingham, heralding a new age of municipal socialism.  […]

And the Labour council in Birmingham will lead by example, calling time on the  misplaced notion that the private sector always trumps the public sector by adopting a policy of in-house preferred for all contracts.’ Cllr Ian Ward’s Foreword. [Ref 7]

We call on Birmingham Labour Council today to state its commitment to launch this model of in-house non-profit municipal retrofit.

 The example of Glasgow

 City Building Glasgow constructs low energy social housing and represents an alternative employment model to the private sector. City Building Glasgow is a not-for-profit organisation, jointly owned by Glasgow City Council and the Wheatley Group Housing Association. (Wheatley is the UK’s biggest developer of social rented homes, providing homes and services to over 210,000 people.) City Building was formed in 2006 from the original Direct Labour Organisation building department of Glasgow City Council.

Most of the 2,200 permanent construction employees of City Building Glasgow are unionised and the Joint Trade Union Council, which includes representatives from UNITE, UNISON and Community, is actively engaged in the organisation and underpins its strong social ethos.

City Building is unique in directly employing under decent standards such a large construction workforce and, where there is subcontracting, monitoring this through a framework agreement that sets employment and quality standards.

This is combined with an in-house training centre providing a comprehensive and acclaimed four-year apprenticeship programme for a diverse intake, including many women and school leavers from disadvantaged backgrounds, with most apprentices staying on as employees; indeed, many senior managers began as City Building apprentices.

A favourable environment for meeting energy efficiency standards is thus provided, one in sharp contrast to the fragmented and insecure employment practices that often characterise the private construction sector in the UK.

The organisation’s LEC [low energy construction] schemes include social housing, care homes, schools, hostels built to varying energy efficiency standards, and retrofitting social housing estates, including through the installation of district heating using air source heat pumps, with some support from the Scottish Government as part of efforts to tackle fuel-poverty.

City Building Glasgow’s highly-equipped manufacturing division, RSBi, has capacity to design, test and produce a range of building materials and internal fittings, is one of the largest supported businesses in Europe, and employs workers across generations of the same family; 60% of the 270 employees have a disability, with access to ongoing support, training and development opportunities. The organisation is rooted in the local community, committed to quality and inclusivity in employment and training and explicitly driven by the needs of the local population and its workers. [Ref 8]

Jobs

‘Local green jobs – accelerating a sustainable economic recovery’ is a 2020 report by the Local Government Association which provides analysis of the jobs required for a net zero economy in England, and where these will be located in the coming years. [Ref 9]

Birmingham 2030:

Estimated jobs in Low-carbon electricity 718

Estimated jobs in Low-carbon heat 2,890

Estimated jobs in Alternative fuels 409

Estimated jobs in Energy Efficiency 2,643

Estimated jobs in Low-carbon services 1,659

Estimated jobs in Low emission vehicles & infrastructure 1,557

TOTAL 9,876

Skills

To fill these jobs Birmingham needs workers with the right training and skills. Retrofitting represents a challenge to the traditions of the construction industry in the UK. [Ref 10]

Successful energy retrofitting will require a ‘house as a system’ approach which recognises the building envelope as a single thermal unit (Clarke et al. 2017). Practitioners working on building retrofit require knowledge, communication, problem-solving, coordination and project management skills (Clarke et al. 2020a). This integrated approach also incorporates socio-technical interventions that traverse distinct professional domains, e.g. wall insulation, low carbon heating installation and the potential addition of renewable energy technologies.

In the UK, a fragmented approach to NZEB [Near Zero Energy Build] expertise is evident, with a VET [Vocational Education and Training] system predominantly organised for narrow specialisation, addressing specific aspects with little emphasis on theoretical understanding of the ‘big picture’ related to climate change. There exists a divide between industry and education, with construction skills development in the private sector coordinated by the statutory employer-based Construction Industry Training Board with little union involvement. VET provision is varied, often almost entirely workbased with minimal educational input, and comes under private training providers, further education colleges, or local authorities.

This is why Friends of the Earth call in their 2021 report ‘An Emergency Plan on Green Jobs for Young People’ for:

A network of National and Regional “Centres of Excellence for Zero Carbon Skills” should be created at further education colleges, serving as hubs for Green Apprenticeship and Traineeship training. The Centres should be tasked with developing updates to existing vocational training, instituting new courses, and supporting schools to incorporate low carbon skills into the school curriculum so that students are more equipped and informed to start green careers. [Ref 11]

How does this compare with the current provision in Birmingham and the West Midlands? In spite of all the claims by the City Council and the WMCA about tackling the climate emergency I have not been able to find in their publications a picture of what training is available in Low Energy Construction in Birmingham and the West Midlands. The only mention I could find is this recent announcement: “Free construction retrofitting courses. The West Midlands Combined Authority is working with training providers across the region to offer FREE construction retrofitting courses.” These are at Dudley College and Solihull College. Dudley is offering ‘Air Source Heat Pump Installation Course. Entry: NVQ Level 3 plumbing or H&V (domestic) or equivalent. 4 day course. Free.’ Yes, just 4 days training. Solihull offers from Level 1 specific construction skills through to HNC Diplomas in Construction. There is no mention of retrofit, or Low Energy Construction.

Contrast this with what Andy Burnham announced in July 2021:

More than 1,000 people to learn retrofitting skills to help city region achieve net zero

Greater Manchester has taken its first key step towards becoming carbon neutral by 2038 through the launch of a training academy to educate more than 1,000 people in retrofitting skills.

European Social Funding of £1.1m has been awarded to Low Carbon Academy, which is part of North West Skills Academy, by Greater Manchester Combined Authority (GMCA) to train and upskill more than 1,000 individuals to retrofit buildings across the region.

The funding will enable the launch of the Retrofit Skills Hub. It will be delivered by North West Skills Academy along with partners The Retrofit Academy, The Manchester College, Oldham College and Fabric.

A total of 1,140 people will be trained to ensure the city region’s homes and buildings are fit for a low carbon future.

The training has been designed to help support a sustainable economy as the city region recovers from the pandemic, while also meeting Greater Manchester’s target of achieving carbon neutrality by 2038, which is 12 years ahead of the national target. (Ref 12]

Now there are some questions to ask about this ‘training academy’: how exactly does it relate to FE provision in GM, and is it a CIC or for profit? But it is streets ahead of what the WM Mayor, or Birmingham Council, has managed. What we need here in the Birmingham area is what Friends of the Earth have called for: a Regional Centre of Excellence for Zero Carbon Skills at levels from entry level to HNC Diploma and degree, provided collaboratively by local FE Colleges and Universities.

Five key Retrofit policy priorities for Birmingham right now

  1. The Council’s plan needs speeding up. 60,000 Council homes over 30 years is too slow. And it needs a Retrofit plan for all Birmingham’s homes (around 450,000), not just Council homes, with funding where needed.
  2. Heat networks are needed urgently for all Birmingham residential areas.
  3. While the Council plans depend initially on private contractors the Council should set up its own municipal in-house non-profit retrofit organisation employing workers on full union conditions, with the aim that it will steadily expand to take over more of the work, thus saving money.
  4. A plan is urgently needed for a Regional Centre of Excellence for Zero Carbon Skills for Birmingham and the West Midlands, at levels from entry level to HNC Diploma and degree, provided collaboratively by local FE Colleges and Universities.
  5. The people of Birmingham need a voice in the plans as they develop in their local areas. And the unions also need full involvement. How will they be represented and heard?

Richard Hatcher

20 February 2022

Richard.Hatcher@bcu.ac.uk

 References

  1. BCC Route to Zero – Annual Progress Report– Appendix 1. https://birmingham.cmis.uk.com/birmingham/Meetings/tabid/70/ctl/ViewMeetingPublic/mid/397/Meeting/12424/Committee/39/SelectedTab/Documents/Default.aspx
  2. Reinventing retrofit: How to scale up home energy efficiency in the UK. https://green-alliance.org.uk/wp-content/uploads/2021/11/reinventing_retrofit.pdf
  3. This section draws on 3 articles: i) ‘Housing retrofit: six types of local authority energy service models’ by Margaret Tingey, Janette Webb, Dan van der Horst, Buildings and Cities, June 2021, https://journal-buildingscities.org/article/10.5334/bc.104/  ii) ‘Ambitions, Activities, Business Structures & Ways Forward’ by Janette Webb, Margaret Tingey and David Hawkey, November 2017. https://d2e1qxpsswcpgz.cloudfront.net/uploads/2017/11/UKERC_ETI_Report_Local_Authority_engagement_in-UK_energy_systems.pdf1_.pdf  iii) ‘Retrofit at scale: accelerating capabilities for domestic building stocks’, by F. Wade & H. Visscher. October 2021, Buildings and Cities. https://journal-buildingscities.org/articles/10.5334/bc.158/
  4. Tingey, M & Webb, J 2020, ‘Governance institutions and prospects for local energy innovation: Laggards and leaders among UK local authorities’, Energy Policy, vol. 138. https://www.pure.ed.ac.uk/ws/portalfiles/portal/128739813/Tingey_Webb2019EPGovernanceInstitutionsAndProspects.pdf
  5. https://www.theade.co.uk/case-studies/utility/birmingham-district-energy-scheme
  6. ‘Housing retrofit: six types of local authority energy service models’ by Margaret Tingey, Janette Webb, Dan van der Horst, Buildings and Cities, June 2021, https://journal-buildingscities.org/article/10.5334/bc.104/
  7. https://d3n8a8pro7vhmx.cloudfront.net/labourclp96/pages/2873/attachments/original/1522078836/ELECTRONIC_10723_18_Birmingham_Manifesto.pdf?1522078836
  8. ‘Unions and the green transition in construction in Europe: contrasting visions’, Linda Clarke and Melahat Sahin-Dikmen, 2020, European Journal of Industrial Relations. https://westminsterresearch.westminster.ac.uk/download/2e5c147576dc3a95ab8d8805104c4c7be94d3373ec0e335738665170b8465190/92117/Clarke%20and%20Sahin-Dikmen%20TUs%20and%20green%20transition%20in%20construction%20submitted.pdf
  9. ‘Local green jobs – accelerating a sustainable economic recovery’, Local Government Association, 2020. https://lginform.local.gov.uk/reports/view/lga-research/estimated-total-number-of-direct-jobs-in-low-carbon-and-renewable-energy-sector?mod-area=E09000006&mod-group=AllBoroughInRegion_London&mod-type=namedComparisonGroup
  10. Retrofit at scale: accelerating capabilities for domestic building stocks, by F. Wade & H. Visscher, October 2021, Buildings and Cities. https://journal-buildingscities.org/articles/10.5334/bc.158/
  11. Friends of the Earth 2021, ‘An Emergency Plan on Green Jobs for Young People’. https://policy.friendsoftheearth.uk/download/green-jobs-report-emergency-plan-green-jobs-young-people
  12. ‘Retrofitting Task Force to drive forward plans for low-carbon homes across Greater Manchester, 20 May 2021. https://www.greatermanchester-ca.gov.uk/news/retrofitting-task-force-to-drive-forward-plans-for-low-carbon-homes-across-greater-manchester/
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