Retrofit London, March 2023

  • By Amy Leppänen

Overview

The Climate Change Act commits the government to achieve net zero carbon by 2050. To achieve this, it is vital we tackle the carbon emissions from our housing stock. Buildings are responsible for 68% of London’s carbon emissions, a far larger proportion than the 40% seen nationally. Given that 80% of homes which will exist in London in 2050 have already been built, retrofitting London’s 3.7 million homes is imperative for addressing climate change and fuel poverty.

London Councils, the collective of local government in London, is taking forward seven major cross-borough climate change programmes, which aim to cut carbon emissions and demonstrate the key role that local authorities play in delivering the net zero transition. Each programme is led by one or two lead boroughs who are responsible for overseeing the implementation of an action plan across key climate change issues, such as sustainable transport and the green economy. Our Retrofit London programme seeks to drive deep reductions in carbon emissions from our homes.

Retrofit London

Retrofit London, led by the London Boroughs of Enfield and Waltham Forest, is an award-winning (See MJ Award, UK Housing Award) collaboration between the 32 London boroughs and the City of London Corporation with support from the Greater London Authority (GLA). The programme aims to facilitate and support fabric improvements, renewable energy generation and heat source decarbonisation to make London’s homes greener and warmer. It seeks to achieve an average Energy Performance Certificate (EPC) rating of B across all London properties by 2030.

Housing retrofit can also have a positive impact on other strategic priorities such as health and economy. National Energy Action’s Strategy for 2021/26 notes that around 10,000 people die every year from the effects of a cold home, while analysis by Parity Projects indicates there are opportunities for over 100,000 new and sustainable jobs in retrofit specific trades by 2030.

Challenges for London boroughs

Based on data from Parity Projects, investment for a pathway towards EPC B by 2030 for London’s 3.7 million homes would cost £49 billion. This is likely to be an under-estimate due to inflationary pressures over the last two years. There are currently significant barriers to delivering retrofit at the scale needed:

  • Increased cost of works due to inflation and the rising number of Londoners in fuel poverty due to escalating living and rent costs in the capital.
  • Despite a series of government funding streams to support retrofit, including the Social Housing Decarbonisation Fund (SHDF), Public Sector Decarbonisation Scheme (PSDS), Green Homes Grant (GHG), Local Authority Delivery (LAD), and Boiler Upgrade Scheme (BUS), committing £6 billion since 2019 for the period to 2025, piecemeal funding programmes from government make it challenging to develop a longer-term delivery pipeline and engagement programmes with residents.  
  • Highly prescriptive national policy support overlooks London’s specific features and distinct housing stock. London has significantly higher numbers of pre-1930s buildings than other regions and the highest number of leaseholders, with 43% of Londoners living in flats. London does not receive its fair share of retrofit funding as a result.
  • Significant skills gaps and constrained supply chains making the scale up of delivery in London more difficult.
  • Diminishing Housing Revenue Account (HRA) financial resources to deliver retrofit on councils’ own housing stock, with the 7% rent ceiling being introduced by DLUHC in 2023/34 leading to a £598 million reduction in income across London local authority HRAs over the next five years.

What is Retrofit London doing?

Retrofit London has started to deliver on its Housing Action Plan, published in October 2021. The programme is building data, knowledge, skills, and expertise to provide resources that will support councils to deliver on their retrofit ambitions. These include:

  • Maximising the use of existing funding and making the case for investment and powers so that local authorities have the resources they need. Retrofit London has also collaborated with the GLA to co-ordinate a pan-London Home Upgrade Grant Phase 2 bid.
  • Collating best practice and lessons learnt to provide local authorities with a central point for retrofit information, including a pipeline of planned retrofit across London to 2030.
  • Guidance and research to address practical challenges and inform the policy and funding changes boroughs need.
  • Mapping retrofit jobs and skills provision and encouraging investment in related trades and jobs. The programme is also working to secure funding to develop retrofit skills training provision for social housing providers.
  • Reviewing and developing approaches to procurement and procurement capability across London, looking to aggregate demand where possible to reduce costs and scale up delivery.
  • Measuring progress to understand what retrofit measures are being installed and how these are improving performance.

Key asks of the government

A number of government interventions could support councils to better deliver retrofit across London. These include:

  • A devolved multi-year funding pot for retrofit to more effectively enable a localised strategy which fits London’s distinct population and housing stock. A devolved retrofit fund has been negotiated as part of the government’s ‘trailblazer’ deals with the West Midlands and Greater Manchester.
  • More flexibility for local authorities when using government grant funding and less red tape. The current limitations and caps in place reduce the ability of local authorities to deliver measures, whilst the onerous audit and monitoring requirements increase administration costs.
  • Additional funding for councils to develop engagement with private sector housing (including landlords and homeowners), helping to develop interest among residents through outreach and advice.
  • Confirmation of higher Minimum Energy Efficiency Standard (MEES) requirements for the private rented sector, ideally EPC B which would align with London’s target, along with additional support from government for councils to enforce standards and support landlords.
  • Use the taxation system to encourage retrofit (for example Stamp Duty Land Tax could be used to lock in value at point of sale).
  • Improve sustainability standards for new developments so that no future retrofit is required.
  • Agreement on consistent standards and installer accreditation (eg PAS 2035 and Trustmark) for all retrofit projects
  • A single method of assessment and recording of measures installed which is required post any qualifying works. Building passports with supporting retrofit plans would achieve this.
Amy Leppänen, Parliamentary Officer