Chartered Institute of Housing says social housing providers face ‘shortfall’ in energy efficiency funding
The government must invest more in tackling poor energy efficiency in residential buildings or risk housing development being cut or homes being sold off, the Chartered Institute of Housing (CIH) has warned.
The CIH, in its submission ahead of next week’s Spring budget statement, warned that social housing providers are facing a shortfall in funding to decarbonise their existing stock.
It said: “Without further support, difficult trade-offs will need to be made which will inevitably lead to reduced development, and/or accelerated stock disposals/rationalisation of ‘hard to treat’ stock – which will not help achieve net zero.
“Urgent action is needed to tackle low energy-efficient housing – escalating oil and gas prices mean that we cannot afford to wait.”
The CIH pointed to figures for the National Housing Federation showing that housing associations need to invest almost £36bn to achieve energy performance certificate band C in their properties by 2030 and replace all fossil-fuel boilers by 2050. It said this implies spending of about £2.2bn annually on top of associations’ current repairs and maintenance budgets of £1.5bn. It said the extra cost of achieving net zero for councils in 1.5m homes is almost £1bn per annum over 30 years, which it said was a “considerable call on resources” given council’s annual capital housing investment is around £6bn per year.
The CIH also called for the government to make more of the promised £3.8bn social housing decarbonisation fund available soon and for ministers to consider other means of funding, such as government-backed loan guarantees.It called for the government’s Heat and Buildings Strategy to be improved alongside investment to support innovation, for a reduction or removal in VAT on decarbonisation work and for investment in “market development to support cost effective retrofit technology and workforce upskilling”.
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The call from CIH follows rating agency Moody’s yesterday warning that housing associations will have to become more leveraged or cut their development pipelines as they cope extra costs due to building safety and decarbonisation. It said these calls on cash were ‘credit negative’ for the housing association sector.
The CIH also called for more investment in new and existing supported housing, an increase in grant levels to support the development of social rented homes, a long-term homelessness strategy and more help for residents to pay their housing costs.
KEY CHARTERED INSITUTE OF HOUSING ASKS
Decarbonisation
CIH is calling on government to:
- make good the commitment to provide the full £3.8bn Social Housing Decarbonisation Fund (promised in the 2019 Conservative Party manifesto), with more being available in next spending review. We need a longer-term programme so landlords can do proper asset management and bid when they are ready rather than because funding is available for a limited time.
- explore other means of funding, including government backed loan guarantee funding to reduce interest costs.
- further develop the Heat and Buildings Strategy, setting clear standards and targets for new and existing stock, with effective measures in place for achieving them, including investment to support innovation and the scaling up of production.
- reduce or remove VAT on decarbonisation work.
- ·nvest in market development to support cost effective retrofit technology (eg heat pumps) and workforce upskilling.
Social housing investment
- Investment should be increased immediately so that 10,000 extra social rented homes can be provided each year at a cost in grant of £70,000 per unit (because the unit cost would be lower for a modest programme) over the period to 2026. The total grant cost for the additional homes would be £700 million annually, increasing the current Affordable Homes Programme to £2.44bn each year, or by 28%.
Supported housing
- Provide a national, ringfenced funding stream for housing related support to address this deficit and to support the sustainability of existing and new supported housing schemes.
This should be at least equivalent to the last such investment programme of £1.4 billion (we note that figures of £1.58 billion for England and £2.05 billion for Great Britain were estimated in the most recent evidence review for government in 2016).
Cost of living
- Restore the £20 per week uplift in universal credit
- Restore local housing allowance (LHA) rates to at least the 30th percentile and return to annual uprating. Remove the shared accommodation rate of LHA
- Shorten the waiting time for the first payment to 14 days for all universal credit claimants with no income
- Abolish the ‘bedroom tax’
- Abolish the £20,000 (£23,000 in London) benefit cap
Homelessness
- ·Develop and resource a cross-departmental strategy to end homelessness in all its forms
- Provide sustained investment in good quality temporary accommodation, floating support, and services
- Provide long term funding commitments to a national roll out of Housing First for people with complex support needs.
- Support a whole housing approach to ensure access to a range of tailored housing options and initiatives giving choice and appropriate support for people experiencing domestic abuse.
- Provide greater support for non-UK nationals who are homeless or at risk of homelessness, including an end to the rules about ‘no recourse to public funds’ and similar restrictions which can cause destitution.
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