Action on energy efficiency: canny politics and scope for real action

By Dr Jonathan Marshall, Head of Analysis

Published:07 July 2020

Despite bungling the press release, the Government finally outlined its actions on tackling energy waste from homes this week. Changing both the amount of money available and the timescales involved from what had been promised before, it has largely appeased campaigners who have been pushing for measures to decarbonise Britain’s housing stock for years.

First up, the good news.

The 2019 Tory manifesto contained £9.2bn of capital spend on energy efficiency, to be delivered through three schemes either five or ten years in length. This week’s announcement will see this time scale condensed into a single year (or even less considering that the programmes won’t get up and running until September and will finish at the end of the financial year).

This puts a massive urgency into the plans. Homeowners who were considering investing in their properties have been given a short window in which to apply for cash – this will create a huge surge in demand, putting tens of thousands of tradespeople back to work almost immediately.

And while there are some concerns over the brevity of the actions announced -as well as only a third of the promised money being put on the table - this sense of urgency wouldn’t be created were the upgrade vouchers valid for longer. This trade off between job creation and overall ambition was always going to be hard to balance, but what the Government has done here to tap into maximum demand as soon as possible is quite canny.

The Chancellor seems to have listened to widespread calls for an efficiency boost

Saying this, it will leave at least 9.5 million owner-occupied homes untouched, so a post-2021 plan will need to emerge at some point.

On public buildings, the Chancellor’s announcement is also a boost on previous plans. The manifesto pledged £2.9 billion for public sector buildings over five years, most of which came from 2022 onwards. This announcement has pulled this demand forwards, and is set to make the most of empty public buildings during school summer holidays and while many are still working from home.

Next up, the less good.

Of the £9.2bn pledged last year, around £3.8bn was for social housing. This has been trimmed back to £50m for a demonstrator scheme. Quite what this will achieve above Government programmes such as the Whole House Retrofit competition, and measures to stimulate electricity-fuelled heating is not yet clear.

What is obvious though, is that this represents a dialling back on ambition for upgrading social housing. With many of the poorest families living in social housing, it is easy to understand why consumer groups and fuel poverty campaigners are sounding the alarm on this shift in focus towards helping those who own their own homes.

The private rented sector also misses out, with the measures that landlords have to install before renting out properties capped at an amount that will, in all likelihood, not see much change.

Overall though, it is hard to see that this is not good news. Detractors point to comparisons with total climate-related spend in other European states, but this contains money pledged to Air France and to compensate owners of German coal-fired power stations.

This £3bn is targeted at one of the stickiest aspects of UK decarbonisation, and looks like it will be delivered in a way that gives the industry a chance to show what it can do, thereby making the case for long-term backing - through which the Government can deliver on the Manifesto ambition and more - and genuine progress on cutting energy waste from the nation’s homes.

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