Whilst many of us have been enjoying the recent snow, the Arctic blast which has hit the UK is no joke for households struggling with the increased costs of energy bills.
The government’s cold weather payments will prove vital for households facing prolonged periods of sub-zero temperatures, but whilst this support is welcome, we must not lose sight of the bigger picture.
It’s only through retrofitting that we can guarantee sustainable ways for residents to heat their homes, bringing down their bills in the long term.
The Social Housing Decarbonisation Fund (SHDF) is currently on Wave 2 and is the main way for the housing sector to access funding for retrofit projects.
Historically, government funding has been a boon to landlords figuring out how to pay for net zero.
No one knows for certain what the final bill for decarbonising the UK’s five million social homes will come to. Whatever the ultimate number, the SHDF is a welcome commitment.
Yet, for its many benefits– from saving residents’ money and improving energy security, to fighting climate change and creating jobs - embarking on such a programme doesn’t come without its risks.
So, what are the main lessons for the sector, and how can we go about navigating potential pitfalls?
1. Early engagement with supply chains is key
Whole house retrofits are complex, and the skills and expertise to drive such projects, while growing, are still not widely developed.
In the absence of existing supply chains, social landlords must bridge this gap.
At L&Q, we are already putting mechanisms in place to deliver decarbonisation work at scale.
We have an ambitious investment programme in the pipeline, and we will deliver energy efficiency projects as part of these planned works.
This means we are taking steps now to identify our path to delivery by actively engaging with the market.
As we come to the end of the procurement process, we will soon be appointing major contracts for the next 15 years.
2. Find the mid-way point between an ambitious and sensible approach
The long shadow of inflation, coupled with an ongoing materials and supply shortage, creates hurdles for us to overcome. In wave 1 of the SHDF, roofing materials, glazing, and insulation were all affected by material shortages.
Given these challenges and the grant’s ‘use it or lose it’ clause, we must recognise the importance of striking a balance between the adoption of an ambitious bid and a sensible approach, as well as making the project part of a bigger piece of work that is already underway.
No matter our size or scale, we can all maximise value by completing energy-saving measures alongside existing works.
A two-year turnaround period is challenging, and we need to be realistic about what we can achieve in this time.
Social homes can have a range of factors that might make them more difficult to retrofit, from technical characteristics and space constraints to external factors such as planning regulations.
As a sector with social purpose at its core, we must learn from the tragic Rochdale case and make strides in tackling hard-to-treat homes.
The key to success is to deliver a balanced approach, ensuring homes with the worst energy performance aren’t neglected and that the people who live in them aren’t disadvantaged.
3. Take action to guard against contractor insolvency
Contractor insolvency poses a threat to project delivery.
This level of uncertainty for contractors can have a direct impact on us, particularly if this happens mid-project, where it can cause a great deal of disruption and price escalation.
What can a housing provider do to protect itself against this happening?
The obvious thing is to carry out financial checks on contractors before entering into contracts, but these can only provide a limited amount of information.
Another option is to operate a target cost model with open-book accounting, a method we are using which will give us access to multiple suppliers.
Not only does this guarantee cost surety and value for money, but it also means that if one contractor fails to deliver, we’ll have others who can step in.
Greater purchasing power is the most powerful tool to mitigate these risks – and for smaller housing associations, this is where consortiums can make a difference.
4. Residents must be at the heart of decisions
Another barrier to delivering retrofits is a potential lack of buy-in from residents – as proven by the under-delivery of previous schemes.
Residents are behind the net-zero transition, but they need the right information and tools to support them on this journey.
We know that they prefer less intrusive measures which will interfere with their lives less and that is why we are adopting a fabric-first approach.
We also plan to establish a pilot retrofit - undertaking works at a void property to showcase the quality of our work and how it can improve people’s homes.
Using timelapse footage, we will demonstrate the end-to-end retrofit process, alleviating the worries of anyone with concerns.
Social landlords have a real determination and a clear incentive when it comes to making our homes greener and warmer for residents.
We know we have lots of homes to improve, and we don’t take our responsibility lightly.
It's this sense of urgency to deliver that will drive innovation, kickstarting a retrofit revolution that will put us at the forefront of the fight against climate change.