Simon Inkson and Robin Staines reflect on the progress made by the 11 stock retained councils in growing their house building programmes and on an exciting new project which will put them at the cutting edge of delivering the next generation of zero carbon homes.
It is sometimes said that if a time traveller returned to Wales today, 100 years since their last visit, housebuilding is the only industry that they would recognise. Homes built back then were largely built the way that the majority of homes we build today are. However, it’s time for things to change. In Wales there is a compelling case for building social housing differently, to build more, and build better which are underpinned by two key drivers.
The first key driver for change, is the Well Being of Future Generations Act and the development of an appropriate response to the climate and bio-diversity emergency. Global greenhouse gas emissions have increased at an exponential rate since the end of the Second World War and we are now starting to experience significant changes in global weather patterns, with more extreme weather events occurring with greater regularity, such as the record high temperatures in Antarctica, and closer to home, intense rainfall and flooding events.
Welsh Government has shown leadership by becoming the first UK nation to declare a climate and bio-diversity emergency in April 2019. The report, produced by the Decarbonisation of Housing in Wales Advisory Group, Better Homes, Better Wales, Better World focussed predominantly on the task of decarbonising the existing housing stock.
Whilst retrofit programmes are important to reduce future CO2 emissions, address fuel poverty, improve health and well-being and increase the comfort of occupiers, alone they are not enough as we need to reduce CO2 emissions now. As the grid decarbonises, through the increasing use of renewable energy, the requirement to significantly reduce the CO2 emissions associated with the construction of new homes will become increasingly important, particularly when you consider that:
- 10 per cent of all CO2 emissions in the UK, are associated with construction activity
- 50 per cent of the whole life carbon footprint of a home, is accounted for before the homes first occupier has set foot inside it.
It is therefore critical that as a globally responsible nation we reduce the carbon associated with the construction of new homes. Whilst this would place Wales at the vanguard of UK nations, we will be following a path developed by other nations across the globe such as the Netherlands, France, New Zealand, Finland and Sweden. Focussing on reducing the carbon associated with housing construction provides an opportunity to make significantly greater use of our natural resources in the construction of new homes, in particular the use of locally grown timber to minimise the whole life carbon footprint of the homes we build. Additional benefits of adopting the use of timber in construction are that timber locks up the biogenic carbon (stored within the wood) within the structure of the home for the lifetime of the home and timber lends itself to further use, once recovered when the structure is dismantled, supporting the circular economy.
Welsh Government is driving change in the area of social housing. The recently published guidance on standards for social housebuilding required developers to move away from the use of fossil fuels for heating and hot water and emphasises the need to reduce levels of upfront carbon associated with development and incorporate recycled materials into the construction of new homes. We consider that this is the start of the journey to reducing carbon in new house building.
We anticipate that at some point in the near future Welsh Government will also use the levers it holds within the grant terms and conditions, to encourage and then require developing social landlords to:
- undertake Lifetime Carbon Assessments (LCAs) of the homes they seek to develop
- undertake post-occupancy building performance evaluation studies, to ensure that the homes constructed match their planned level of performance.
We also anticipate that slightly later still, Welsh Government will introduce limits on the levels of upfront carbon associated with the development of new social housing, funded by central capital grant and only provide grant funding to developers who can demonstrate that they have closed the performance gap.
The second key challenge which drives change is the fact that along with the rest of the UK, there is an affordable housing crisis in Wales. We are not currently building homes in the numbers required to meet the housing needs of the people of Wales, as was noted by the independent Affordable Housing Supply Review[1].
Two recent reports set out Welsh housing requirements. The first study[2] shows that the central estimate produced (based on estimates of unmet housing need and the 2014 based household estimates) suggests that on average 8,300 new homes of all types and tenures are needed annually in Wales for the period 2018 – 2023. This includes an average of 1,100 new homes annually to clear the existing backlog of unmet need.
The second[3] shows the tenure split of the additional homes required to be 53 per cent market housing (4,399) and 47 per cent affordable housing (3,901). It is highly likely that once the Covid 19 pandemic is behind us, the level of need for affordable housing is likely to increase. If we as a nation are to close this gap in the number of affordable homes completed annually and meet this administrations target of delivering 20,000 low carbon homes over the lifetime of the Senedd, the housing association sector and the 11 councils with a housing stock will have to pick up the pace of their development programmes.
To usher in a new age of council house building Welsh Government has engaged in an ongoing dialogue with councils, recognising for most, it will be the first time they have built in significant numbers for a generation. Since the late summer of 2019, Welsh Government officials have engaged in conversations with councils to find out what challenges developing new homes created for them, and the obstacles that prevent them from building at scale and pace and it is these conversations which have helped shape the actions that Welsh Government have taken to support councils.
Councils are at different stages in the development process with some starting to deliver significant numbers of homes each year, whilst other councils have focused on bringing existing homes up to the Welsh Housing Quality Standard (WHQS) and have only recently shown ambitions to build and are starting to develop their capacity to build homes at scale and pace. From conversations it is clear there are some big challenges facing councils, but all agree that there are some things that are within their own gift to work towards.
A key challenge for councils is for them to recognise the importance of housing and the Housing Revenue Account (HRA) to their tenants, the organisation itself, and to the citizens and economy of their localities. The 11 Welsh councils who continue to own and manage housing spend in the region of £360 million each year on the maintenance and improvement of their homes and the development of new social rented homes[4]. Since local government re-organisation in Wales in 1996, the housing function has lost its former priority in the structure of many councils. For those councils with an HRA this trend needs to be addressed and recognition made of the importance of a well-managed, strong and well connected housing function can make to the delivery of new council homes which address not just housing needs but also the regeneration of town centres, wider social and economic well-being and health improvement agendas.
As part of the process of supporting the 11 stock retained councils to accelerate their development programmes we have worked with colleagues in Welsh Government and stock retained councils to:
- establish a regular forum for the 11 councils with an HRA to enable positive practice to be shared and partnerships/collaborations to develop
- produce and seek views on a Housing Revenue Account manual, which sets out precisely how HRA funds can be used to support development plans. The consultation has recently closed and the final version of the document will be published in the coming months
- co-produce a practice note for councils and housing associations on partnership working and procurement
- support the Welsh Local Government Association and council Section 151 officers to calculate prudent borrowing levels, based on consistently applied key metrics, enabling councils to recognise and grasp the opportunity to maximise their investment in the construction of new homes
- publish housing development process maps which provide a useful tool to aid navigating the development process and offer guidance to practitioners and wider stakeholder groups
- co-produce a database used by all councils to record their development programmes, to enable progress to be monitored
- host a series of positive practice seminars, where all councils can learn about positive practice being utilised by individual councils and key stakeholders.
The 11 stock retained councils are starting to show progress in respect of the delivery of new homes. Table 1 below shows actual and projected council house completions in Wales between 2018-19 and 2022-23.
Table 1. Actual and projected new council homes in Wales 2018-19 to 2023-24 (includes completions and acquisitions)
| Year | Number of Completions |
| 2018-19[5] | 57 |
| 2019-20[6] | 234 |
| 2020-21[7] | 492 |
| 2021-22 | 526 |
| 2022-23 | 812 |
| 2023-24 | 1,416 |
This shows that the support provided to the councils is working and that the 11 councils are on an upward trajectory in terms of new home completions. In 2021-22 will the 11 councils will break a 27-year-old record when they complete over 500 new homes in a year and in 2023-24 will break a 38-year record when they complete over 1,000 homes in a year.
Welsh Government is also taking two further steps to support councils to accelerate their development programmes and to support them build homes in the right way. The first is the provision of central capital grant to councils to support their development programmes. From April 2021, Welsh councils with a retained housing stock received, within their total funding package for social housing development, an allocation to support their HRA development programmes, meaning that their programmes which were previously almost totally underpinned by HRA borrowing, can be stretched further.
The second step is a collaborative project supported by the 11 councils and three housing associations (Cartrefi Conwy, Coastal and United Welsh) to design and develop a system for the delivery of net zero whole life carbon homes. This project which builds on one of the completed work packages of the Home Grown Homes project will see the partnership enter an Innovation Partnership with a supplier to design, prototype, test and obtain a system warranty for the build system to deliver a range of zero carbon timber framed house types, at scale and at a price that is affordable.
The homes, which the partners consider will be an advanced timber panel system which utilises natural insulating materials (either wood fibre or cellulose insulation) will have extremely low levels of embodied carbon (meeting the RIBA Climate Challenge 2030 target levels of embodied carbon) and will achieve extremely high levels of performance by minimising energy demand to 35 kwH/m2/year (again achieving the 2030 targets set out in the RIBA Climate Challenge).
The procurement process is currently underway and it is hoped that the contract will be let to a Welsh based partnership of designers and manufacturers. On completion of the Innovation Partnership contract, which is expected to last in the region of 18 months, framework contracts will be created to supply the homes to participating social landlords.
It is hoped that Welsh based manufacturers will secure these contracts, as this means of meeting the needs of the population of Wales needs to create more opportunities for creating and retaining wealth in local communities and creating sustainable employment opportunities. By providing opportunities for Welsh based SME’s who adopt modern methods of construction (MMC) to grow, in particular the production of panelised and volumetric homes, Wales can be an exemplar of the construction methods that will need to be widely adopted to mitigate the impact of climate change.
The adoption of a zero carbon standard in new homes and greater adoption of MMC provides an exciting opportunity to reshape and redefine the way we think about, design, build, and ultimately live in social housing in Wales. It allows us to challenge outdated and unimaginative approaches to ensure that we continually question whether we are providing the best housing for those in the greatest need. As ever it is critical that the tenant must remain at the heart of our efforts to reform the social housing landscape.
Simon Inkson and Robin Staines are joint project leads for the Council House Building at Scale and Pace Project (contracted to CIH but based within Welsh Government)
[1] gov.wales/independent-review-affordable-housing-supply-report
[2] Estimates of housing need in Wales at a national and regional level (2018-based). Welsh Government. 2019
[3] Estimates of Housing Need in Wales by Tenure (2018-based). Welsh Government. 2019
[4] Figures drawn from statswales local government finance capital and revenue spend
[5] statswales.gov.wales/Catalogue/Housing/New-House-Building/newdwellingscompleted-by-period-tenure
[6] Data drawn from HRA Business Plan returns of the 11 councils
[7] Data drawn from Development Programme Monitoring Workbooks of the 11 councils