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CIH Cymru – Time to invest in decarbonisation

The funding landscape for WHQS 2023 is at odds with the timescale of ambition, says Cerys Clark.

Recent media reports suggest that 2023 saw a record number of days where the average global temperature was at least 1.5°C higher than pre-industrial levels. Yet our ability to stay below this threshold is key to avoid the damaging impacts of climate change.

Welsh Government in 2019 declared a climate emergency committing to achieve net zero in social housing by 2030. Moreover, energy costs have been the single biggest driver of the cost-of-living crisis, particularly for those tenants on low income living in fuel-poor or social housing. The best way to insulate them against future energy costs spikes is to insulate their homes and provide cheaper energy sources.

These twin themes are a key part of the Welsh Government’s new set of standards for WHQS 2023 part of which focus on the decarbonisation of existing housing stock in Wales. Following a lengthy consultation period with the housing sector and relevant stakeholders, the finalised standards have now been published. In the finalised standards Welsh Government has acknowledged concerns raised by social housing providers about the timescales for meeting decarbonisation and net zero targets. This has resulted in a set of standards that afford more flexibility for landlords in meeting decarbonisation targets using a planned approach.

Social housing providers also asked for clarification on the level of funding to be allocated to meet the new standard. Currently there is no indication that Welsh Government will be providing additional funding to social housing provided to meet these new standards. The only funding indicated is the existing Optimised Retrofit Programme funding of £70 million in 2023/24 and an indicative amount of £70 million for 2024/25. Yet the Future Generations Commissioner put the total level of investment needed to retrofit our social housing stock by 2030 at £5.5 billion (of which £1.7 billion should come from the Welsh Government). This is much higher than the level of indicative funding from Welsh Government.

Social housing providers are already having to manage real-term cuts to their budgets due to ongoing inflationary pressures. Whilst they are committed to decarbonising their stock and moving to net zero more funding will be needed to support social housing providers to meet the new WHQS standards. Welsh Government has stated that its new planned approach to implementing these standards will help alleviate some of the funding issues and will work with landlords to explore future avenues of funding over the coming years. Yet the equitability of the new planned approach needs to be considered.

All properties will need to be brought up to EPC C by 2030 with EPC A to be met at some point in the future to be determined by individual social housing providers. Some landlords are already meeting the targets and are likely to meet EPC A in the short to medium term. Others will need significant investment to bring their housing up to an EPC C in the long term and investment at a higher level than currently committed to by Welsh Government. This could leave some social housing tenants in a property that is not as energy efficient as others in their local authority area resulting in a housing system that perpetuates the impact of inefficient homes, specifically fuel poverty.

If we are to ensure that everyone in Wales can access an energy efficient home and seek to eradicate fuel poverty we will need increased investment from Welsh Government. As outlined by the Future Generations commissioner, investing in decarbonising our housing in Wales will increase our GDP by £19.32 billion and create more jobs.

So, with record levels of warming in 2023 and further warming projected in 2024, now is the time to act. As a sector in Wales , we share the ambition of the minister to consign fuel poverty to history and to decarbonise our housing stock, and we are more than happy to work with government around flexibility on funding but we shouldn’t ignore the realty. The annual allocation to housing from the Welsh Government has averaged only 2.2 per cent since 2006. Does that accurately reflect the nature of the housing emergency we face and the level of investment needed to meet our shared ambition of a more sustainable and affordable housing option for everyone in Wales?

We need to ensure that the level of investment in decarbonisation in Wales meets out ambition of Wales becoming a net zero nation by 2050.  We need to make housing a foundation mission of government and fund it accordingly.

Cerys Clark is policy and public affairs manager at CIH Cymru

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