Chamber and committees

Retrofitting Housing for Net Zero - December 2021

Letter from the Convener to the Cabinet Secretary for Net Zero, Energy and Transport - 10 December 2021

Dear Michael,

Retrofitting housing for net zero

The Local Government, Housing and Planning Committee held an evidence session on retrofitting housing for net zero at its meeting on 30 November. This session was preceded by a visit to a retrofit project on Niddrie Road in Glasgow. Informed by their experience there, and what they heard at the meeting on 30 November, members agreed to write to you raising issues that arose out of those sessions.

The Committee has also obtained the right to a committee debate on this issue when it will be able to explore these issues further and it would be helpful to have your response ahead of then. That debate will be taking place on 18 January 2022, so it would be helpful to have your response by 11 January 2022.
I should start by saying though that this is very much the beginning of the Committee’s work on retrofitting housing for net zero and the Committee recognises that this is not something it could possibly do justice to in one session. The Committee expects to continue to return to this issue throughout the session and to scrutinise the Scottish Government’s approach including the effectiveness of its Heat in Buildings Strategy.

The Committee recognises the huge scale of the task ahead in relation to Scotland’s approximately 2.5 million homes. It is something, however, on which the Committee wants to see real and urgent progress. Elizabeth Leighton of Existing Homes Alliance explained to the Committee that the Existing Homes Alliance, working with Changeworks, were looking at models to accelerate the pace of retrofit. Specifically, she mentioned models of collective purchase such as bulk buying, payment plans, community ownership and third-party ownership. They are different ways of taking forward neighbourhoods of homes as a group in a faster, more efficient and more cost-effective way for everyone. The Committee would welcome an indication of how the Scottish Government intends to increase the pace of retrofit, including how it envisages local authority heat and energy efficiency strategies will contribute to this.

The Committee is concerned about the lack of public awareness of what is required to be done to housing in order to meet the Scottish Government’s net zero target by 2045. Witnesses suggested to us that COP 26 has raised public awareness of climate change and the need for action, but there isn’t an understanding yet of what that will mean for people’s homes. It would seem to the Committee that this increased public awareness of the need for action afforded by COP 26 provides an ideal opportunity to advance public understanding of this issue.

The public need to know what will be expected of them, how much it will cost to make changes to their houses and how it will be paid for. The timescales for making these changes are already very tight and people need to have clarity and certainty as soon as possible. The Committee would welcome further information on how the Scottish Government intends to improve public understanding and awareness to ensure that the public feels invested in these measures. The Committee would be particularly keen to understand what the Scottish Government sees as the role for the National Public Energy Agency in driving improved public awareness.

In order to be able to drive this forward there is obviously a need for adequate funding. The Committee is concerned that at the moment there is simply not enough funding in place in order to deliver on the ambitions of the Scottish Government’s plans for retrofitting. The Committee recognises that funding for retrofit measures will need to be a partnership effort between the Government, social landlords, owners, private landlords and private lenders, but even allowing for funding from different sources it is still going to highly challenging to find the £33 billion the Heat in Building Strategy estimates will be required to retrofit homes and buildings for net zero.

We think that there is also a real challenge in accessing funding for retrofitting. Derek Logie of Rural Housing Scotland described the current funding landscape to us as an “alphabet soup” with real challenges in knowing where to obtain funding from and how then to obtain that funding. In order for the pace of retrofitting to increase people need to be clearer on how they can access funding The committee also heard from Bryan Leask of Hjaltland Housing Association that funding for organisations is still not being allocated strategically as funding is allocated through a bid process. This means that organisations are competing against each other. The Committee would again welcome an indication from the Scottish Government of what it intends to do to make pathways to funding more transparent, strategic and accessible.

The Committee would also welcome further information on what the Scottish Government intends to do to ensure a just transition. We recognise that the Heat in Buildings Strategy contains the principle of no detriment, so that nobody will be worse off as a result of retrofitting their home. The Committee welcomes this principle. People should not be worse off; they should be in a warm home that is affordable to heat and which is healthier for them.

The Committee also heard from witnesses about the importance of a fabric first approach. The Committee recognises that technology is moving fast in developing new and better ways to heat homes, but these measures in themselves will not deliver the necessary reductions in emissions nor will they provide people with homes that are healthier or more affordable to heat. The Committee would welcome the Scottish Government’s view on a fabric first approach.

One of the real challenges will be how retrofitting will be delivered in mixed-tenure blocks. Witnesses suggested to the Committee that there is insufficient clarity in the Heat in Buildings Strategy on how this will be delivered. The Committee would welcome further clarity on the Scottish Government’s plans for meeting the particular challenges presented by mixed-tenure blocks.

The Committee also recognises the differing challenges that are presented in a rural setting. In particular, we noted the increased costs and skills shortages associated with retrofitting in rural Scotland. The Committee would welcome further information from the Scottish Government on how they intend to respond to these challenges in rural areas.

To deliver on the ambitions of the retrofitting agenda, there will be a need for a skilled workforce in place. The Committee recognises that the Heat in Buildings Strategy does set out broad plans for such putting in place such a workforce. The Committee would welcome an indication from the Scottish Government of what more specific workforce planning has taken place to ensure that there is such a skilled workforce in place and how that will be monitored.

The Committee would also welcome the Scottish Government’s perspective on the challenges of delivering on the retrofitting agenda alongside the current planning system. The Committee heard about the obstacles that in some cases planning departments are placing in the way of retrofitting. The Committee believes that the two should not be in conflict with one another and would welcome the Scottish Government’s view on how that can be achieved.

The Committee is also keen to know what international models the Scottish Government considered in the development of its Heat in Buildings Strategy and more generally in its approach to this issue. For example, to what extent did the Scottish Government draw on the experience in Germany where retrofitting homes has a much longer history.

Finally, the Committee is also writing to the UK Government in relation to VAT on retrofit work and electricity tariffs.
I am copying this letter to the Convener of the Net Zero, Energy and Transport Committee given that this is an issue which falls within that committee’s remit too.
I look forward to hearing from you and receiving your response by 11 January 2022.

Yours sincerely

Ariane Burgess MSP

Convener, Local Government, Housing and Planning Committee