Regional devolution: a new frontier for low carbon retrofit?

The UK government is not currently doing enough to decarbonise the housing stock and protect householders from rising energy bills. In their 2016 progress report, the Committee on Climate Change concluded: "Progress improving the energy efficiency of buildings has stalled since 2012." This was echoed by the Energy and Climate Change Committee’s report on energy efficiency which urged government to “[…] promptly demonstrate a renewed commitment to tackling energy efficiency”.

It is also widely recognised that current levels of investment fall far short of what will be required to meet our 2030 national fuel poverty target: as Policy Exchange identifies, there is a funding gap of £700m a year. But potential for national government action seems limited largely due to the high profile failure of the Coalition government’s Green Deal policy. Ministers have become reluctant to put home energy efficiency at the top of their priority list.

With this in mind, it is interesting to look at devolved governments across the UK, not only Scotland, Wales and Northern Ireland, but also at the English regions. Six combined authorities will be getting new directly elected mayors this May: Liverpool city region; Greater Manchester; the West Midlands; the West of England; Tees Valley and Cambridgeshire and Peterborough.

The combined authorities are new political structures sitting above the multiple councils in each of these regions. The Greater Manchester Combined Authority, for example, encompasses Bolton, Bury, Manchester, Oldham, Rochdale, Salford, Stockport, Tameside, Trafford and Wigan. Of course there’s one big established precedent for all this, the London Mayor and Greater London Authority which has been in place since 2000.

What can the new mayors do to promote low carbon homes?

Each combined authority has a different devolution deal so powers do vary but if we look at the precedent that London has set we can get a sense of what could be done on energy efficient housing as more powers are devolved. Some of the key areas we think the future mayors should be pushing for are:

  • Zero carbon new builds. In 2015, George Osborne axed a long-standing commitment to national zero carbon newbuild standards. But London’s zero carbon new build standards came into force last October. New developments have to comply with tough emissions standards or pay to offset the carbon.
  • Retrofit programmes. London set up RE:NEW and RE:FIT, retrofit programmes for residential and public buildings, respectively. Although RE:NEW hasn’t quite transformed London’s housing stock yet, the fact that the Mayor is committed to domestic retrofit is important – and it’s never easy to get it perfect the first time around!
  • Municipal energy companies. Bristol, Nottingham and London have all being developing local energy companies and while having a metro mayor is not a requirement to do so it means that it can have more reach and over time grow and expand into other services.
  • Boiler scrappage. While not necessarily achieving large carbon savings replacing old, polluting boilers with new, more efficient boilers can be important in tackling fuel poverty.  
  • Heat planning and district heating. Tees Valley Combined Authority is already doing work matching up waste heat from industrial sources with local demand and the Mayor of London has been vocal about waste heat. With heat being one of the hardest areas to decarbonise and local conditions varying so much, combined authorities can really get their teeth stuck into this.
  • Making the most of national policies. There is £640 million per year on offer through the Energy Company Obligation (ECO) and combined authorities can do a lot to attract as much of this as possible to their areas.

While the specific “devolution deal” signed with Westminster varies region to region, and they will not be getting masses of new funding (each combined authority will get access to 30-year investment funds representing between £15 million and £36 million a year) the new metro-mayors will have significant powers. Their portfolios will cover economic strategy in their region and powers over areas such as transport, health, skills and housing.

An important part of combined authorities’ work will be to join up activity across a larger area and pull in different budgets in innovative ways. This will be particularly effective in tackling cold homes. Investing in energy efficiency can save on health budgets by reducing hospital admissions, GP visits and prescriptions. Mayors can join up energy efficiency and health budgets through schemes such as “boilers on prescription” in recognition of the fact that cold, draughty homes aggravate health problems.

An additional (and important) part of the metro-mayors’ arsenal will be soft power – the ability to bring business and civic leaders together and exert moral pressure to take action on carbon reduction and energy saving. In London, for example, the Mayor’s Business Energy Challenge awards made the most of the Mayor’s public platform to encourage businesses to cut down their energy consumption and move to cleaner energy sources.

Crucially, the mayors’ strategic role will mean they will be able to take a region-wide approach and align different objectives and departmental remits to cater to local requirements. Nowhere could this be more important than in driving a new regional approach to low carbon/low energy housing.

As such we believe that the regions can take the lead and prove that strategic investment in energy efficiency improves people’s lives, boosts local economies and supports security of supply. This evidence will help us keep up the pressure on national Government to make the right policy choices and make energy efficiency an infrastructure priority.

Joseph Cosier is a policy officer at the Energy Saving Trust

The views expressed in this essay are those of the author, not necessarily those of Bright Blue