Meeting of the Parliament (Hybrid)

Meeting date: Tuesday, January 18, 2022

Official Report 1038KB pdf

---

Retrofitting Buildings for Net Zero

The next item of business is a debate without a motion on behalf of the Local Government, Housing and Planning Committee on the retrofitting of properties for net zero.

I invite members who wish to participate in the debate to press their request-to-speak buttons now or enter R in the chat function, and I call Ariane Burgess to open the debate on behalf of the committee.

15:56  

The Local Government, Housing and Planning Committee is delighted to have the opportunity to debate the retrofitting of housing for net zero. The committee is beginning work on the issue, but it is not only an issue for our committee; it is relevant to the Net Zero, Energy and Transport Committee and, as we move closer to the deadline for meeting the agreed net zero target, it will be an issue for the whole Parliament. We hope that the debate will be helpful as we consider next steps.

Homes account for around 13 per cent of Scotland’s total greenhouse gas emissions. To reduce emissions by 75 per cent by 2030 and hit net zero by 2045, Scotland’s homes will need to be far more energy efficient. The Scottish Government aims to reduce emissions from heat in buildings by 68 per cent by 2030. There is a tremendous job ahead to deliver on that target, and that is recognised in the heat in buildings strategy. The committee agrees that targets should be that ambitious.

Before describing the committee’s work and the challenges ahead, it is worth stepping back to consider what retrofitting involves and how it contributes to targets. Simply put, retrofitting means adding new technology or features to existing buildings to make them more energy efficient. That can include loft, floor and wall insulation, draught proofing and secondary, double or triple glazing. As well as being about energy efficiency improvements, it is about installing zero-emissions or net zero-emissions heating or connecting homes to heating networks that are supplied by low carbon or renewable heat sources. In Scotland, only 11 per cent of households have no or low carbon-emitting heating systems.

The committee visited a retrofit project in Niddrie Road in Glasgow, which is concerned with retrofitting a tenement comprised of eight one-bedroom flats. We were impressed with the work being done and we thank John Gilbert Architects and Southside Housing Association for hosting us. We recognised the time and effort required to deliver a project of that scale.

The Scottish Government proposes that homes must meet energy performance certificate rating C in future. In 2019, less than half of Scotland’s homes were at EPC rating C or better. There are around 2.5 million homes in Scotland. When we consider the work that is involved in delivering the Niddrie Road project and the fact that such work might need to be done on more than 1 million homes, we realise the herculean scale of the task.

How do we increase the scale and the pace of the work? What must be in place? In November, we met stakeholders to explore those issues—I thank them for participating. They raised a range of issues and we agreed to write to the Scottish Government to seek its views on them.

We started by asking how it intends to increase the pace of retrofitting. In doing so, we highlighted models of collective purchase, such as bulk buying, payment plans, community ownership and third-party ownership. In its response, the Scottish Government recognised that the pace needs to increase significantly. It is looking at the models highlighted and working closely with stakeholders to develop them.

We asked the Scottish Government what role it sees for local heat and energy efficiency strategies in setting out long-term plans for decarbonising buildings and improving energy efficiency across local authorities. From the response, we note that the Government’s intention is for each local authority to publish its strategy by 2023. Given the urgency of the situation, we hope that the strategies can be in place before then.

From the climate change plan, we note that the Scottish Government has committed to considering how local tax powers, such as for council tax and non-domestic rates, could encourage retrofitting. I would be grateful for any updates on the progress of that work.

At this morning’s Net Zero, Energy and Transport Committee meeting, I asked witnesses whether communities were aware of the impending deadlines and any support of which they might be able to avail themselves in order to do the retrofitting. I was told, “I think the answer is no to all those questions”, and “there is a lack of anywhere householders can go for knowledgeable expert advice that they can actually trust.”

How does the committee think that that can be changed or challenged?

As I said earlier, the committee is just beginning the process and asking questions of the Scottish Government. I will continue, as I have a few more questions to ask on behalf of the committee.

One recurring theme that we heard was the importance of public buy-in. Witnesses suggested that the 26th United Nations climate change conference of the parties—COP26—has raised public awareness of climate change, which provides an ideal opportunity to advance public understanding of the role of housing in reaching our targets. The public need to know what will be expected of them, how much it will cost and how it will be paid for.

We asked the Scottish Government about its plans to improve public awareness, and the role of the national public energy agency in that. It is pleasing to see that the Government recognises the importance of public awareness, and I am keen to hear more about the role envisaged for local authorities in improving it. To drive that work, there must be adequate funding. We are concerned that not enough funding is in place to deliver those plans. That is our most pressing concern, and what prompted us to initiate our work.

The committee recognises that funding will be a joint effort among Government, social landlords, private landlords, private lenders and owners. However, even allowing for funding from different sources, it will be challenging to find the £33 billion that the heat in buildings strategy estimates is required.

It was good to hear that the Scottish Government is establishing a green heat finance task force to report by September 2023. It would be good to hear more about the task force and how the Scottish Government intends to encourage investment in the interim.

We also heard about the challenges of accessing funding. Derek Logie of Rural Housing Scotland described current funding as an “alphabet soup”, with challenges in knowing where to find funding and how to get it. I welcome the recognition in the minister’s letter of the importance of the consumer journey, and it would be good to hear more about what the Scottish Government will do to improve it.

Bryan Leask of Hjaltland Housing Association Ltd told us that funding for organisations is not being allocated strategically, but rather through a bid process. Therefore, we were pleased to read in the minister’s letter that the social housing net zero heat fund is no longer allocated on a competitive basis.

For retrofitting to work for all, it must be delivered in line with just transition principles. We recognise that the heat in buildings strategy contains the principle of no detriment, which we welcome. Nobody should be worse off due to retrofitting their home.

The committee also heard about the importance of a fabric-first approach, and the need to improve the fabric of existing homes to make them more energy efficient. It is pleasing to see the Scottish Government’s commitment to fabric first and to legislating to require buildings to meet energy efficiency requirements. Of course, that will work only if there is public buy-in and funding in place. However, funding and public awareness are not the only challenges—there will be particular challenges around retrofitting in mixed-tenure blocks.

Witnesses suggested that there is insufficient clarity on how that will be delivered in the heat in buildings strategy. The minister’s letter is welcome in offering more detail on how some of those challenges might be overcome. We are keen to be kept updated on that.

There must be a skilled workforce in place. We considered that the heat in buildings strategy sets out broad plans for putting in place such a workforce. The minister’s letter provides more detail on that, and we look forward to scrutinising the Scottish Government’s heat in buildings supply chain delivery plan. The potential for 16,400 jobs being supported across the economy in 2030 due to investment in the deployment of zero emissions heat is a welcome prospect.

The committee recognises that the challenges are more acute in a rural setting. In particular, we noted the increased costs and skills shortages. The minister’s letter refers to the provision of more funding and the role for the islands energy strategy. We are keen to hear more about how the green jobs workforce academy will respond to the demands of rural settings.

I note that the Existing Homes Alliance Scotland calls for a rural homes just transition package. I would be interested to hear the minister’s perspective on that suggestion.

The committee heard about the challenges of retrofitting under the current planning system. In some cases, planning departments have placed obstacles in the way. We do not believe that the two are in conflict. As noted in the minister’s letter, we will consider that further in the context of national planning framework 4.

With such a significant task ahead, we must draw on experience from elsewhere. It is pleasing to hear about the memorandum of understanding between the Scottish Government and the Danish Government, and it would be good to hear more about what lessons the Scottish Government has learned from elsewhere.

Finally, challenges remain that are outwith the control of the Scottish Parliament, specifically concerning VAT on retrofit work and electricity tariffs. Those issues significantly affect the viability of delivering the retrofit agenda and doing so with just transition principles. We will pursue that with the United Kingdom Government, and we note that the Scottish Government is already doing so.

I reiterate the enormity of the challenge. We must deliver on that and, as a Parliament, we must hold the Scottish Government accountable and ensure that it does everything that it can to make it happen.

16:07  

I thank the committee for its on-going work on the issues arising from the retrofitting of buildings. As Ariane Burgess noted in closing her speech, that is an enormous challenge that we must confront together as a critical part of our response to the climate emergency.

The challenge is significant in part because of the scale and pace of the emissions reduction that we need to achieve across our building stock. That includes switching more than a million homes from fossil fuels to zero-emissions heating by 2030. It is ambitious because it needs to be. Parliament has set us the statutory requirement to reduce emissions by 75 per cent by 2030. What we are debating today is what we need to do in our homes and other buildings to deliver that. Not delivering it is simply not an option.

Although we must be clear-eyed about the scale of the retrofit challenge, we must also recognise that investment in the heat transition brings great opportunities: green jobs in a burgeoning clean heat sector; new skills and training; and greener, healthier and more efficient homes and workplaces across Scotland.

Last October, I published the heat in buildings strategy, which sets out an ambitious policy package to progress those objectives. I am not for a moment shying away from the fact that the actions that we have committed to are only the start of a multidecade programme of work up to 2045 and beyond. The strategy is a strong foundation, but much work remains to be done to realise an unprecedented transition.

I am therefore grateful to the committee and to other members for joining this debate, and for their input into the efforts to move to zero-emissions heating and energy-efficient buildings. I am keen that we develop a cross-party consensus to take forward that agenda.

I want to highlight three broad issues that are fundamental to making the transition a success. The first of those is public engagement, which Ariane Burgess, the committee convener, mentioned.

I was pleased to hear that committee witnesses suggested that COP26 had raised public awareness of the need for action. However, we need to recognise that most people do not yet have a clear understanding of what that means for their homes. Zero-emissions heat systems, such as heat pumps and heat networks, enjoy long pedigrees in many other European countries but are unfamiliar to most of us in Scotland. I want that to change in a way that engages people in a shared understanding of the need for that change and how to make it.

The upcoming dedicated national public energy agency will play a central role in public engagement. It will also support the streamlining of our delivery programmes by bringing new co-ordination and leadership to the issue and making it straightforward for people to access advice and support as and when they need it.

The second point that I will touch on is certainty. Building owners need certainty about what is needed to meet the requirements of net zero, and companies in the supply chain require sight of a clear pipeline to invest in and grow their businesses. Therefore, a critical component to our approach of creating certainty will be to introduce regulations.

Building on existing standards that require action on energy efficiency and zero-emissions heating, we will introduce regulations that will, from 2025, require all homes to reach a good level of energy efficiency—EPC C rating or equivalent—at point of sale or change of tenancy. From the same year, regulations will also begin to require action to be taken on buildings’ heating systems as we phase out the need to install fossil fuel boilers.

Later this year, I will publish a consultation on those proposals. I will introduce legislation during this parliamentary session and I look forward to working with the appropriate committees, as well as the wider Parliament, on developing those regulations.

If the minister introduces those regulations and mandates all of those changes, how does he expect people to pay for them?

By happy coincidence, the next paragraph in my speech begins, “The third issue I wish to raise is cost.” I recognise that members and members of the public have serious questions. At the beginning of a multidecade programme of work, no Government would be in a position to say what will happen right through to 2045 and beyond. However, we have committed at least £1.8 billion in this session of Parliament to kick-start the growth in markets for zero-emissions heat and energy efficiency and to support those who are least able to pay. I am pleased that, this morning, we announced almost £9 million of support through the low carbon infrastructure transition programme, with an impressive variety of projects that provide zero-emissions heat across homes and non-domestic buildings.

One project in particular will be of interest from a retrofit perspective: a grant of £1.27 million to the reheat project led by Scottish Power Energy Networks to install heat pumps in 150 homes along with smart controls and innovative heat batteries that are manufactured by Sunamp in East Lothian. As well as decarbonising the homes that are participating in it, that project will generate insight into how the grid can accommodate a greater role for electricity in heating our homes, which will minimise the need for capacity upgrades and will drive costs down.

Public investment in the heat transition is critical, but we have to be clear eyed. We estimate that the total cost of the heat and energy retrofit transition to 2045 will be in the region of £33 billion. That sum is clearly beyond the level that the public sector could bear alone so, alongside public investment, we need innovative mechanisms to increase individual and private sector investment into energy efficiency and zero-emissions heating. Therefore, we are establishing the green heat finance task force to recommend ways that the Scottish Government and the private sector can collaborate to scale up the investment. The task force will provide an interim report by March next year and final recommendations by September that year.

A just transition means sharing the benefits of climate action widely while ensuring that the costs are distributed fairly. That means that we must continue to support those who are least able to pay, and that is why we will publish a refreshed energy strategy and just transition plan later this year. It also means that those households, organisations and businesses that have the means will share some of the costs, particularly where they benefit directly.

The transition to zero-emissions heat will be an enormous project, around which we must work together if we are to play our part in halting damaging climate change. I am proud of the leadership that we are showing in Scotland, and I welcome the contributions being made both within the Parliament and across the country to charting an effective and fair course to decarbonising our buildings.

16:15  

I am pleased to open the debate for the Scottish Conservatives, and I welcome the opportunity to discuss this important issue, which the Local Government, Housing and Planning Committee has brought to the chamber today.

“Challenge” is definitely the descriptive word of the debate. The Scottish Government has committed to decarbonising the heating of 1 million homes by 2030, which serves as a prelude to the aim of zero emissions from buildings by 2045. That was set out in law, as the minister has outlined, in the Climate Change (Emissions Reduction Targets) (Scotland) Act 2019. Scottish Conservatives agree with that commitment and share the Government’s ambition to achieve it, with a desire for Scotland to lead by example in the fight against climate change.

The Scottish National Party-Green Government launched its heat in buildings strategy, as the minister outlined, following the consultation that ran from February to April 2021. The key part of the strategy has already been mentioned: how will householders and tenants be able to meet the challenge? Heating accounts for roughly 50 per cent of energy use in Scotland and, in order to cut greenhouse gas emissions, it is important that we reduce our reliance on fossil fuels and instead move towards low-carbon or zero-carbon heating systems.

It is important to say at the outset of the debate that, at a time of rising energy bills and increased focus on tackling fuel poverty, it is critical that ministers do not lose sight of those challenges as we take forward this work. It is also important that, while we seek to achieve that, we keep heating bills at affordable levels—the most affordable possible—and the most effective way of doing that is to reduce energy need with better insulation and efficiencies in homes.

I hope that real investment can be brought forward at an earlier stage. As things stand, homes account for approximately 13 per cent of Scotland’s total greenhouse gas emissions, so a huge amount of work is needed, beyond what has been outlined in warm homes campaigns and targets.

It is absolutely right that Scotland sets itself ambitious and pioneering targets that focus on improving energy efficiency in our homes, and that we move towards zero-emission heating systems. That said, the SNP-Green Government proposals are long overdue, and they require significantly higher investment so that those targets may be reached. There are significant questions around how the targets are going to be met and about the workforce who will be tasked with undertaking so much of the work. The Construction Industry Training Board found that, to retrofit Scotland’s existing built environment for net zero, a revolution will be needed across the construction sector. It is estimated that 22,500 people in Scotland will need to be trained to deliver that energy efficiency by 2028. We have not seen work start on any workforce plan, and that issue is equally important to the debate.

Scottish Conservatives will continue to press the Government to deliver the investment that is required to achieve those goals, to ensure that they are cost effective and that the proposals do not place a disproportionate burden on home owners and tenants.

As well as my work on the Local Government, Housing and Planning Committee, I also sit on the Social Justice and Social Security Committee, which recently took evidence on fuel poverty. Tenants from Glasgow gave us evidence regarding the changes that they had seen with the fitting of heat pumps to their properties. They expressed significant concerns in a number of areas, which I hope the minister will take on board. The new systems have been significantly expensive, which pushed a number of tenants into fuel poverty. Housing associations have not listened to tenants’ concerns, and tenants were not properly consulted when the pumps were fitted to their properties. We must take that on board, as we need to take people with us on this journey. Tenants in Glasgow deserve better than what they told us they received.

Retrofitting existing buildings with relevant carbon-neutral technology will form an integral part of Scotland achieving net zero by 2045. I hope that Scottish Government ministers will provide more detail on the target and explain how it can be reached, while keeping things affordable for home owners across Scotland.

In keeping with the Scottish Conservatives’ manifesto promises in 2021, the Scottish Government has supported the creation of help-to-renovate schemes as a way of supporting home owners to make their properties more energy efficient. We welcome that, but we also want to see how the rural transition fund will be used. We know that one of the hardest sets of properties to retrofit are those in rural parts of Scotland, and those will need additional funding to help meet the target.

That brings me on to a specific point with regard to the heat in buildings strategy, which the minister touched on: how we can ensure that energy efficiency improvements are put in place. Some of the first elements of that work could be to carry out wall and floor insulation. Those are vital in reducing emissions as they make properties more efficient. I hope that we will see an early emphasis on those elements in rural properties, especially through the provision of support and part funding. There is much work to do, and this debate presents an opportunity for us to take that work forward.

From statistics that the Government has already presented, only about 11 per cent—or 278,000—of Scottish homes have a renewable or very low-emission heat system, not including the 34,000 homes that are connected to heat network systems. The development of heat network systems is an exciting opportunity, and funding for that should also be brought forward.

To date, as the minister outlined, only £1.8 billion over this parliamentary session has been committed to meeting the challenges. It is worth noting that the Government has missed its legal emission targets for three years in a row.

Although we agree that Scotland needs to decarbonise and to tackle fuel poverty, energy bills are soaring and the cost of living is increasing under this Government. Therefore, we must ensure that we work towards making things as efficient as possible for home owners.

The Scottish Government has not yet allocated the resources that are required for its plans to be met, and we must ensure that reasonable support is provided to home owners.

Today, we call on the Government to work on a cross-party basis to meet the challenge. I genuinely hope that today’s debate starts a more focused cross-committee process, to make sure that Parliament holds ministers to account for all related legislation.

16:22  

I draw members’ attention to my entry in the register of members’ interests as an owner of a rental property in North Lanarkshire.

Retrofitting and decarbonising our homes has been a huge focus of our work in the Local Government, Housing and Planning Committee since last June, and the debate is a welcome start in discussing the benefits and costs of retrofitting.

There was a partial email blackout yesterday. Unfortunately, it was not a full one, so colleagues might already know what I have to say this afternoon.

Householders will be liable for enormous bills. Costs will average £12,500, which will be a huge concern to home owners and tenants alike. The Government’s commitment so far of £1.8 billion just will not cut it. As Susan Aitken told the Net Zero, Energy and Transport Committee outright last week, the costs will run into the tens of billions of pounds.

The cost of living crisis that we face makes those sums even more concerning. The panic about rocketing energy bills is palpable. It is a bitter irony that the recovery will cause the spiralling of the number of people in fuel property who are struggling to heat their homes, which already affects one in four.

We agree that we are in a climate emergency. We agree that, if we improve the fabric of our homes, we can cut fuel poverty, decarbonise our homes, reduce living costs and create vital local jobs. We know that our homes contribute three quarters of the building emissions that are warming the planet. However, no one wants to hear that low-income home owners must fork out thousands of pounds to sort that out.

Right from the start, the Government has been putting too much on to home owners, and tenants, who will ultimately pay more in their rents, too quickly, with too little support. The proposed changes are big and disruptive, with real risks for home owners. The matter is complicated.

Homes need to be made energy efficient, reducing our energy demand and expenditure, and then we should replace heating systems with ones that are carbon free. There are questions about some of the technology and communities know that cowboys operate in the sector, often causing more harm than good. Early experience of carbon-free heating systems is mixed. Social rent tenants and new-build buyers have been the guinea pigs so far.

North Lanarkshire Council told me that its retrofits and heat pump installations have achieved fantastic results against oil heating, with one tenant seeing bills drop by 80 per cent. However, a housing association told me that it is removing an unreliable district heating scheme, and tenants at another in Glasgow are being served with disconnection notices because the costs of the district heating scheme are well above those forecast and tenants cannot afford to pay their bills. Others in the Western Isles have had infra-red heating panels fitted, and they are also getting huge bills. Many of those tenants and associations have no recourse to funds to have the systems removed or remediated, or exceptional costs underwritten.

We believe that households should be protected from the huge up-front costs of retrofitting through grants and loans and, crucially, that the technology should be tested in the real world. Until the costs are comparable to those of a fossil fuel system—the likely point of adoption—is it not right to ask for the excess cost of installation and remediation to be underwritten by Government, expanding on the no-detriment principle set out in the heat in buildings strategy and mentioned by the committee convener?

I suspect that if it was possible for the public sector to fund every penny of the transition and relieve all homeowners of the need to make any contribution, we would all love to do that. Can the member suggest a way of funding that? Is he actually suggesting that we do more than is in the heat in buildings strategy and pay for every penny of it from public funds?

I will come on to other issues around costs, particularly for tenants. I am saying not that the public sector should fund all of it, but that low-income households that are already struggling with their fuel bills should not have to bear the brunt of those costs. I am not saying that the costs should be paid entirely by the state; I am asking whether the state could cover the up-front costs through grants or loans, so that payment could be staged over a longer timescale.

I come on to the cost to tenants, which involves making the case for rent controls to be introduced as soon as possible in this session of Parliament, so that tenants are not left picking up the bills for and costs of social landlords making changes to their homes. The Scottish Federation of Housing Associations’ modelling for new energy efficiency standards shows that the standards would reduce fuel poverty by only 24 per cent, but are due to cost £2 billion. Decarbonising the heating source as well would cost £6 billion and SFHA members say that the EPC modelled costs are likely to underestimate the true costs. Concern was also expressed by Chris Morgan, an architect working on the Niddrie Road demonstration project, about getting a Glasgow tenement to EnerPHit or Passivhaus standard, since EPCs do not measure the energy efficiency of buildings particularly accurately.

The Scottish Trades Union Congress has said that we need to learn from past transitions. It said:

“Done wrongly, decarbonising our homes could push costs onto tenants, increase fuel poverty and lead to work needing to be redone.”

If we do not recognise that and make supporting home owners and tenants our primary goal, we will not have their confidence and decarbonising their homes will not be the success that we all hope that it can be.

16:29  

I welcome the Local Government, Housing and Planning Committee’s initiation of the debate. As the convener said, the committee is in the foothills of its inquiry, but it has already set out clearly some of the key issues that it will look at in more detail.

We know that 50 per cent of energy use is for heating—as Miles Briggs reminded us—and although we must drive up standards for new buildings, we know that about 80 per cent of the existing housing stock will still be around in 2050. Retrofitting will be absolutely crucial and will affect households and businesses in every part of the country. It is therefore appropriate that members beyond those who are on the relevant committees have an opportunity to contribute.

In that context, I am grateful to those who have supplied briefings for the debate, including those who did so inadvertently. I reassure Mark Griffin’s colleague that we have all been there.

In the short time that is available, I want to focus on three key areas: cost, capacity and communications. On the first, we know that the strategy for heat in buildings comes with a £33 billion price tag. Funding of around £1.8 billion has been announced, but there is little clarity on how it will be used. The Local Government, Housing and Planning Committee and the UK Climate Change Committee have expressed concern about the need for greater transparency and for a breakdown of how plans will make achievements on the path towards net zero. In part, those are needed to track progress—or a lack of progress.

At micro level, the Scottish Government estimates that the average cost for installing a heat pump and improving energy efficiency is about £12,000 per home. However, on islands and in rural communities that are off the gas grid, the costs are significantly higher. According to a response from Michael Matheson to a written parliamentary question, it is about £17,000. I can certainly confirm that, on the smaller islands in my constituency, the costs are considerably higher still. Those are communities that, traditionally, have experienced the highest levels of fuel poverty and extreme fuel poverty, so it is incumbent on ministers to be absolutely up front about the funding that is available and about what is realistic in terms of achieving the objectives—the cost contribution that is expected from individual householders and businesses, and what targeted support will be provided to those who are least able to pay and those who face higher costs due to their island or rural location.

As with costs, there seems to be a bit of a mismatch between the Government’s aspiration and the capacity to deliver. As the minister rightly said, there is no doubt that we will see the creation of green skills and green jobs, but wishing that it were true will not simply make it so. For example, scaling up heat-pump installations from 3,000 to 200,000 a year will take a lot of people, a lot of training and an awful lot of investment. It is unclear how that will be achieved in the timeframe that is envisaged and throughout the various parts of the country in which it is required.

On communications, “Heat in Buildings Strategy: Achieving Net Zero Emissions in Scotland’s Buildings” acknowledges, as the minister himself did, that public understanding of the role of heating in causing greenhouse gas emissions is low. The convener emphasised that concern in her opening remarks, and I know that the committee wants a process for accessing advice and support that is as easy as possible.

That point has been picked up by the just transition commission, which warned of the dangers in that area. It said:

“The backlash against implementation of new regulations on smoke and carbon dioxide alarms shows how this can go wrong, and we must not risk the same happening for our transition to net-zero.”

In addition, Energy Action Scotland confirms that

“In many hard-pressed families, there is no recognition of net-zero. They will have many other issues to deal with. They could feel further alienated or excluded from moves towards net-zero if it isn’t well communicated.”

I welcome the debate, I wish the committee all the best with its inquiry and I confirm that Scottish Liberal Democrats support the drive to net zero through retrofitting. However, on cost, capacity and communications, the rhetoric is running well ahead of the reality at this stage.

Before we turn to the open debate, I remind all members to ensure that their cards are properly inserted in consoles and that, if you are seeking to speak, you have pressed your request-to-speak button.

There is no time in hand. Therefore, any interventions will have to be absorbed within the speaking time of the member concerned.

16:33  

I refer members to my entry in the register of members’ interests: I am a serving councillor on East Lothian Council.

I am grateful for the opportunity to speak in this important debate. Only in November last year, the world came together here in Scotland for the COP26 conference to discuss our collective goal of net zero by 2050. Shaun Spiers, the Green Alliance executive director and chair of a conference session called “Beyond COP26”, said:

“There is no simple, off the shelf solution to reaching net zero, but there is a growing understanding of what needs to be done.”

We need to build on that, here in Scotland.

The penultimate day of COP26 was dedicated to cities, regions and the built environment. Why? Simply put, it was because there is now clear recognition that the industries of the built environment are capable of doing more to solve climate challenges and reduce emissions.

In 2019, the World Green Building Council released a report that indicated that the built environment is producing approaching half of global carbon emissions—far more than any other sector. It is no surprise that reducing emissions from our homes and buildings will be one of the most important things that we can do to end Scotland’s contribution to climate change. We have heard already today that our homes account for 13 per cent of Scotland’s total greenhouse gas emissions.

We have some of the most ambitious climate change targets in the world, aiming to reduce emissions by 70 per cent by 2030 and to reach net zero by 2045. The Scottish Government’s “Heat in Buildings Strategy” sets out how we plan to improve energy efficiency and support the decarbonisation of Scotland’s homes. In its most recent report, the Climate Change Committee said that

“Scotland is ahead of the rest of the UK in setting out buildings decarbonisation policy”,

but we need to do more.

Retrofitting existing homes has a significant role to play in addressing the concerns that most Scottish households have about their energy costs and carbon consumption and could help us to make fuel poverty a thing of the past. The Existing Homes Alliance Scotland recommended that local authorities lead the scoping of what work is required in their own areas. That is important. Doing that in my own East Lothian constituency will be different to doing it in the Highlands. We have talked about the challenges of that.

I welcome the green heat finance task force that the minister mentioned. The committee has a role in leading on that and on the approaches to scoping and finance.

The Scottish Government has already committed to decarbonising the heating of at least 1 million homes—that is a big challenge, as we have heard today, but it is one that must be met—and the equivalent of 50,000 non-domestic buildings by 2030. Any action to decarbonise our homes must be taken in a manner that protects people who are in, or are at risk of, fuel poverty from increased fuel bills—we cannot make the changes by risking putting more people into poverty—and avoids placing a burden on those who are least able to pay for the transition.

In its written evidence to the Social Justice and Social Security Committee, The Existing Homes Alliance made it clear that

“We should use the green recovery and net-zero transition as an opportunity to build a more inclusive, resilient, and net-zero society”

and that

“There is absolutely no excuse for poor energy performance of the home to be a reason to be in fuel poverty.”

“Heat in Buildings Strategy” sets out the significant steps that the Scottish Government is taking, including taking actions only where they have will no detrimental impact, unless additional mitigating measures can also be put in place. That must be fundamental to how the committee takes the issue forward.

Scotland does not have all the powers that are necessary to deliver the transformational change that is required while leaving no-one behind. We all know about the recent increases in wholesale energy prices. The potential impact on consumers further underscores the urgent need for UK Government action. That must be done on a long-term basis. We can make changes, but any continuing problems with wholesale energy prices will have a detrimental impact.

The Scottish Government’s plan for whole-house retrofits and the zero emissions first approach that we have adopted will prove to be vital in proofing homes against fuel poverty and will avoid the costs caused by repeating inventions or replacing fossil fuel heating in a few years’ time.

We urgently need a stronger commitment and a clear action plan on heat from the UK Government to prevent the undermining of the Scottish Government’s attempts to bring every Scottish household along with us towards a net zero Scotland.

In conclusion, I say that retrofitting gives us the opportunity to tackle fuel poverty and move us towards being a net zero Scotland. As we also heard in the statement about ScotWind, there are also opportunities to develop new skills and new supply chains and to provide skilled jobs. I look forward to working with everyone in my constituency in developing this vitally important sector.

16:30  

Retrofitting properties for net zero is an ambitious goal, but there is a significant credibility gap, particularly when it comes to the roughly 170,000 Scottish homes—about 7 per cent of the total—that are off grid.

“Heat in Buildings Strategy” requires that zero-emissions heating must be installed in all homes by 2045, with no new or replacement fossil fuel boilers to be installed in off-gas properties after 2025, in favour of zero-emissions heating.

I want to reiterate a point that Liam McArthur made. When I asked how much it would cost to upgrade a

“typical hard-to-heat off-gas grid home”,

the cabinet secretary told me the average cost could be “in the region of” £17,000. In a further answer, the minister conceded that

“While the output temperature of a heat pump is often lower ... when appropriately configured with building fabric and radiators or underfloor heating they efficiently bring indoor temperatures up to adequate levels.”—[Written Answers, 4 November 2021; S6W-03776.]

“Underfloor heating”, Presiding Officer! Some organisations suggest that such works could increase the cost to around £30,000 for home owners who are often some of the 25 per cent who are already in fuel poverty.

Indeed, a recent poll of over 1,000 rural households found that 33 per cent were unable to afford to spend any money on a new heating system. The cabinet secretary tells me that they could get a loan of £15,000, but that would still leave a minimum extra payment of £2,000 up front, as well as—of course—the need to pay back the loan.

Nowhere does the strategy address whether electric heat pumps are the best option, practically or financially, for rural or off-grid homes. After storm Arwen, I had innumerable constituents contact me during the electricity outages expressing how lucky they were to still have fossil fuel fires or heating.

Will the member take an intervention?

I ask Mr Ruskell to bear with me. I will take an intervention if I have time.

There are about 120,000 off-grid homes in Scotland that use either liquefied petroleum gas or oil heating. The cost to people who use oil heating of switching to LPG or bio LPG is about £2,000. Those who are currently on LPG can switch to bio LPG without any intervention cost. People might also want to explore biomass systems, which are extensively used in places including Scandinavia and Canada. They can be installed easily and locally at a cost of about £8,000 and they offer a genuinely circular net zero economy.

However, how does the Scottish Government explore those technologies? It does so by proudly announcing:

“We have already phased out oil and LPG boilers from Warmer Homes Scotland, Area Based Schemes or Home Energy Scotland Loans”,

It forces electric-only options on off-grid households. Last week, I met Liquid Gas UK, which is a trade association with around 100 members. I learned a great deal that could help with rural and off-grid Scotland’s transition on the journey to net zero, but I also learned that Patrick Harvie, who is the minister who is responsible for this area, has not met the group at all since being appointed, and neither has the cabinet secretary.

The point that I am making is that there is no one-size-fits-all solution to any of this, be it on energy generation or the satisfaction of demand. A mixed-technology approach to heating is clearly essential to achieving the net zero targets, especially when it comes to off-grid properties. There is a serious disconnect between the £33 billion cost and the Scottish Government’s lack of planning, engagement and financing. It is surely incumbent on us all to work collaboratively with our partners across the United Kingdom—and, as Miles Briggs said, across this Parliament—to find solutions, to consider all options dispassionately against the science and the practicality, and to actually meet and hear from the people in the industry who are best placed to help with that.

16:42  

Mark Wilcock is 58 years old and he works for Highlands and Islands Enterprise. He has lived in Nairn for two years, having purchased a flat in a tenement where a bank formerly carried out business on the ground floor. He chose to live in Nairn for its natural beauty, its history and the lifestyle that it offers.

The building, which was constructed in 1874, is listed. The flat is now draughty and the windows need to be replaced. He obtained a quote for uPVC windows at a cost of £4,500, but he was then advised that, because of the listing, sash-and-case windows would be needed. The overall cost of replacing the windows—there are only six—with that type would be £16,000, which is over three times the cost of new uPVC windows. That is not a bill that he can afford.

I raised aspects of his case with the Scottish Government, and the minister, Jenny Gilruth, arranged a call with senior officials from Historic Environment Scotland. They have been extraordinarily helpful, and dialogue continues on how the work that is needed can be done in order to bring the standards of heat insulation up to the required level.

Although only a small proportion of homes in Scotland are listed—maybe 1 per cent—they are commonly affected by much higher costs to bring them up to higher standards of insulation, which is essential if there is to be efficient use of fuel, lower emissions and, therefore, a less severe impact on the environment. Mark has allowed me to raise his case today and I am grateful to him. I ask the minister how people in his situation can be assisted in order to tackle what seems to be a very practical problem. For every Mark, there could be thousands of others.

A second constituent—again, she is a flat owner—contacted me to raise the situation where one or more flat owners in a tenement are, for whatever reason, not willing to agree to essential common repairs, or perhaps to pay for them: the so-called missing shares situation.

I understand that some councils in Scotland—the City of Edinburgh Council, I think, and, perhaps, Glasgow City Council, although I am no expert in any of this—have taken a lead in paying for the costs of the recalcitrant or non-co-operating owners and recouping those afterwards, and that that has been highly successful. Will the minister bring in a national scheme? I ask because my constituent in Inverness has no access to such a scheme, nor do many others, who are mostly in rural constituencies, in which, perhaps, there are fewer tenements but still many tenemental owners.

I have raised those two issues because unless we tackle the existing problems that are faced by flat owners throughout Scotland, we are kind of missing the point. Of course, we all want net zero to be achieved, but what about the here and now? What about the people who are faced with an impossible position, right at the moment? Will the Scottish Government bring forward the missing-shares solution, through providing a national fund?

In preparing for the debate, I read an excellent piece of analysis: a report by Douglas Robertson, who is an acknowledged expert on housing, which is entitled, somewhat provocatively—but accurately—“Why Flats Fall Down”. We have a very serious problem with structural failures in flats in Scotland. Here and now, the problem is to get essential repairs done and to improve the housing stock, otherwise, in the future, there may be considerably fewer flats left to tackle the problems of net zero that the minister has described.

16:46  

I thank the committee for the excellent work that it has done. We are all agreed that we have to reduce carbon emissions by retrofitting our homes. I will speak about the wide gulf between where we want to be and our ability to achieve it. So far, many speakers have addressed that.

What is important is that if Scottish householders are to be adequately supported to make changes, they must have confidence in alternative heating systems. Have we even agreed on what the trusted alternatives are? Mark Griffin, Liam McArthur and Liam Kerr have hit the nail on the head by raising some of those issues.

I am seriously concerned that ordinary families and workers have no idea of how to take matters forward, although I know that the minister has tried to address that. The majority do not have £7,000, £10,000 or £14,000 to spare for a new heating system. Even if they had, who will guarantee that the purchase of a zero-carbon heating system will reduce their heating bills or will be a genuinely more efficient heating system for their homes? There is a lot to consider—not just the financing of it.

The International Energy Agency has stated that if net zero is to be achieved, gas boilers should no longer be sold from 2025. Electric heat pumps—air source and ground source—are seen as the most effective alternatives to gas boilers. However, those can cost anything from £4,000 to £14,000 to purchase and install. That, presumably, is why demand remains low.

Last year, the UK Government announced grants of £5,000 for home owners in England and Wales to install heat pumps. In contrast, Home Energy Scotland offers households a maximum interest-free loan of £2,500 to install a heat pump, and that has to be paid back within 5 years. We see the wide gulf between where we would like to be and where we are. Demand is currently so low that, by October last year, Home Energy Scotland had approved loan funding for only 80 hybrid heat pumps—and in the previous year, the loans that it had approved were in single figures.

In the Glasgow region, which I represent, the cost of retrofitting is eye watering. Glasgow City Council’s leader, Susan Aitken, has estimated that it will cost £9 billion to retrofit around 450,000 homes. That is more than four times the council’s budget. We therefore see the wide gulf regarding what needs to happen.

Glasgow and Edinburgh, in particular, have to wrestle with the problems of retrofitting tenement flats. There are an estimated 182,000 tenements across Scotland, including around 73,000 in Glasgow. Those flats tend to be constructed of sandstone, and most were built pre-1919,?which?makes energy efficiency solutions much more complicated.

In April last year, the Niddrie Road project began. It is a pilot project to retrofit a block of eight tenements in Glasgow. John Gilbert Architects was commissioned by Southside Housing Association to undertake a full retrofit of the flats, which are empty. It is a massive job, including the renovation of the internal finishes and fittings as well as the upgrading of external elements such as the roof and stonework. The project aims to assess the replicability of the lessons learned for Glasgow’s wider pre-1919 tenement stock. However, the construction cost per flat is an incredible £88,000. When we can see those huge costs, we need to look at what would in fact be possible.

There is a huge number of issues to be addressed, including the huge skills shortage, which will be a problem for retrofitting our homes. I ask the Scottish Government to start engaging seriously with ordinary householders about how we will achieve those targets and to consider the reality that people will need extensive financial help.

Crucially, however, they will need not only financial help but help in relation to the type of heating systems that they can trust: the alternatives that have been tried and tested and that will directly benefit them as well as making sure that we make the reduction in carbon emissions in our homes across Scotland. Ordinary people should not pay a high price for a change.

Please conclude.

It must benefit the whole of society.

16:51  

I celebrate the ambitious targets for reaching net zero. However, as others have said, the scope, scale and complexity of the journey is significant—and nowhere more so than in relation to the national challenge of retrofitting homes. It is not an incremental challenge and it requires an exponential scale-up in an order of magnitude. We have heard references to the estimate of £33 billion in the debate already.

I propose to make a few points about both the supply side and the demand side. On the supply side, there are significant barriers for manufacturers. The high capital expenditure needed to create or repurpose existing manufacturing lines is an issue, particularly for the smaller companies that are currently operating in the market. For installers, there are early-stage product risks and capacity issues that will limit scale-up, as has been mentioned. It will also take time for those small companies to build brand awareness. Most operators are currently small and medium-sized enterprises, which can mean weak financial resilience and limited access to investment finance. For all involved in the supply side, there are complex skills considerations, with the requirements still a bit of a moveable feast. Because there is uncertainty, there has to be hesitancy.

On the demand side, the Scottish Parliament information centre briefing notes:

“The high upfront costs and sometimes uncertain payback periods can put people off making changes to their homes.”

Like other speakers in the debate, I would put it more strongly than that. At this stage, in such uncertain economic times, there is no real demand from home owners, particularly if they do not see their property as their forever home. Some of the costs that are being quoted today, in the range £12,000 to £17,000, will act as a major barrier.

Another point is that new heating models are not yet seen as aspirational in the way that the likes of electric cars are. Despite the urgency of the situation, costs are a concern for suppliers and consumers alike, and on-going assessment for manufacturers, installers, home owners, renters and landlords will be required as initiatives come on stream.

There are other challenges. The Scottish National Investment Bank, capitalised with £2 billion over 10 years, has a key role in addressing market failure. However, at the Finance and Public Administration Committee last week, we heard that with the enabling United Kingdom Internal Market Act 2020 leading to the Subsidy Control Bill, it is uncertain whether and how the SNIB can operate as intended and contribute to the addressing of market failure in retrofitting. Despite the bill passing the committee stage in the House of Commons, there is no definition of the rules as to how the SNIB—and, indeed, the British Business Bank—can meet their core purpose. Clarity is not expected from the UK Government for some time, and the required rules might ultimately be developed by an unelected official in the Department for Business, Energy and Industrial Strategy, without scrutiny by the House of Commons, and bypassing this national Parliament and Scottish Government ministers. The uncertainty will have a cooling effect on councils and other bodies, which will be nervous about risking expensive and time-consuming legal challenges in trying to create programmes that address the issue that we are debating.

Some innovative financing, which would attach funding to the property rather than the individual, has been considered, but such an approach can lead to hesitancy on the part of future buyers and sellers, as we have seen in the context of solar panels.

On financing, the Westminster all-party parliamentary group on fair business banking, for which I am an ambassador, made an interesting point in a report:

“The SME-dominated retrofit supply chain largely falls between the cracks of existing investment funds and approaches: too late-stage and insufficiently high-growth for venture capital; too early-stage and high-risk for institutional investors.”

Please conclude, Ms Thomson.

I will, Presiding Officer.

I celebrate Scotland’s ambition to take the required steps forward, but, as the debate proves, it will be a considerably complex process to get us to where we need to be.

16:56  

I refer members to my entry in the register of members’ interests: I am a serving councillor in North Lanarkshire Council.

This afternoon, we have heard thought-provoking speeches about retrofitting and transforming the construction industry to help to achieve the net zero target. We have heard calls for the Scottish Government to invest, to be innovative and to say how the retrofitting programme will be achieved, so that targets are not missed and opportunities are not squandered.

We are up against the clock when it comes to climate change. Given that 40 per cent of emissions come from construction and the built environment, there is a need to make the industry cleaner and greener. It will be a significant challenge to reduce emissions across Scotland and the rest of the UK, but the need to do so presents an opportunity for the building sector to find new and innovative ways to retain and grow the workforce, improve the environment and improve the quality of the assets that are built.

It is, undoubtedly, easier to make homes in new-build housing estates more environmentally friendly, as people are working with a blank canvas. Reducing carbon emissions from existing buildings will be a critical part of achieving net zero. Places such as Glasgow will present a significant challenge, as we heard, but the Niddrie Road development is transforming flats in a tenement without damaging the iconic front-facing sandstone structure. As a person who appreciates architecture and the need to conserve an area’s history, I think that it is important that the work that is carried out does not change the original landscape.

We must ensure that the changes that we are talking about are made affordable for local people, as Miles Briggs said when he opened the debate for the Conservatives. If programmes go ahead but the homes become unaffordable, the project will have failed. We heard such concerns from many members.

I agree with Liam Kerr that a one-size-fits-all approach to transforming our housing stock will not work and that we need to look at a mix of technologies for heating, given the need for affordability.

A key component of a successful retrofitting programme will be the upskilling of the workforce. According to the CITB report “Building Skills for Net Zero”, an estimated 22,500 people in Scotland will need to be trained or retrained in energy efficiency by 2028 if we are to meet climate change targets. The CITB said:

“That represents an increase of around 9% of the current size of the workforce, based on current technologies and ways of working.”

A recruitment drive will be essential. Reskilling and apprenticeships could offer people of all ages opportunities to learn skills for jobs in what should be a secure sector. The Government needs to start the recruitment drive now.

As a member of the Local Government, Housing and Planning Committee and a councillor in North Lanarkshire Council, I want to talk about councils’ key roles and responsibilities when it comes to improving housing stock and meeting the net zero target. I mentioned Glasgow, but every local authority will have to develop a strategy to make homes across all tenures, not just its housing stock, more energy efficient. Councils will need substantial backing and funding if they are to meet that challenge. I ask the SNP-Green Government please to take note that councils need funding now.

Councils will need to build new relationships with housing associations. That will be vital in ensuring a collegiate partnership approach to achieving the net zero target.

It will come as no surprise when I say that the Scottish Government must do more to meet its net zero targets and make the plans a success. That requires the Scottish Government to hit its emissions targets, which it has failed to do previously. It also requires it to invest in green housing, to be up front about where the money to decarbonise is coming from—as that information has not been forthcoming—and to fund local government properly. Another real-terms cut of £371 million this year will only hinder councils’ net zero targets, and they will struggle to deliver local strategies if the Government continues to treat them with contempt.

17:00  

Across the chamber this afternoon, and for many years, we have heard about the critical role that tackling our carbon footprint will play in meeting the climate crisis head on. The constituency that I live in and represent, Glasgow Kelvin, is the Scottish constituency with the highest proportion of flats—96 per cent of the accommodation in Kelvin consists of flatted dwellings, and 30 per cent of Glasgow’s pre-1919 tenemental housing, with its associated challenges, is in Kelvin.

I put on record my admiration for the housing association movement, which, in the past, has been in the vanguard of the work towards low and zero-carbon homes, particularly through energy efficiency measures and higher building specifications in its regeneration and new builds. It has not gone unnoticed by me that, in the affordable housing supply programme, more than half of the 2020-21 approvals for greener standards were for housing associations. In the past, housing associations were accused of gold plating their developments, as if that was a bad thing. Their foresight has paid dividends, and many in the private sector now need to catch up with that.

I recently wrote to every social housing provider in my constituency to better understand the challenges that they face in decarbonising homes. The survey identified decarbonising heating systems, funding models for retrofits and skills shortages as the key issues, all of which are interrelated. Scottish Government funding is welcome, but social housing providers require new models of private investment in net zero and low-carbon infrastructure. On the skills gap, the Construction Industry Training Board believes that a revolution in our construction sector is needed to meet the challenge. I intend to do all that I can to assist in transforming Scotland into a centre of excellence for greener jobs and careers.

It is not only in our housing stock that those changes are necessary; it is in all buildings. Only yesterday, I met the chief executive of Visibility Scotland to discuss its plans for its headquarters, based in the Woodside area of Kelvin. The charity has a period property of substantial size that is in need of significant improvement, and it sees retrofitting as an exciting opportunity to safeguard its home for future generations while making its workplace and service provision as energy efficient as possible. I look forward to supporting Visibility Scotland in its efforts to decarbonise.

I recently wrote to the Minister for Zero Carbon Buildings, Active Travel and Tenants’ Rights regarding low-carbon initiatives and tenemental property. The transformation of tenemental properties to be lower-carbon buildings is fraught with obstacles. The objection of one owner can act as an effective veto against the plans of the majority to take climate action. Much of the legislation that can be used by a majority to force minority interests to act in tenemental property issues is related to maintenance and insurance, so it fails to address transformative common works such as electric charging points and communal renewable heat and power systems. That relates to the owners of tenemental properties, but it indirectly impacts the quality of low-carbon housing for tenants. I understand that that may require primary legislation—for example, through changes to the Tenements (Scotland) Act 2004 and regulations. I look forward to the minister indicating whether legislative, regulatory or policy changes are in the offing to address those issues, as well as whether the new deal for tenants will include measures to require landlords to make their properties as energy efficient as possible.

I am mindful of the time, so I will jump to the end of my speech. Highlighting our successes on this journey to net zero not only should be welcomed but should be used to inspire greater change at a faster pace.

17:05  

I thank the committee for securing the debate. Our homes are central to the zero-carbon vision of the future, but they also tell us stories about our past.

A number of years ago, when we started retrofitting our family home, we first discovered the hearth for the Victorian coal range. Then, the more that we progressed with uncovering the layers of the building, the more we could see its history and how the changing needs for more living space, for better sanitation and for electrification had shaped the way in which the house had been retrofitted many times over many decades, first by councils and latterly by private owners. The drive for decarbonisation is really just the latest form of modernisation, although it will probably be the most transformational since the arrival of electricity in our homes.

The aim of decarbonising Scotland’s 2.5 million homes when only 11 per cent of them currently have renewable or low-emission heating systems in place points to the scale of the challenge. Meanwhile, soaring electricity and gas prices, reflecting Westminster’s energy and taxation policies, are fuelling a cost-of-living crisis, with more than 30 per cent of households estimated to be in fuel poverty. We need to ensure that the delivery of energy-efficient housing prioritises fuel-poor homes, especially in our rural and island communities, in a way that leaves no one behind.

Programmes of Government grants and loans, energy supplier and landlord obligations, fuel pricing and regulation and area-based schemes will be critical to the delivery of the strategy. Local and community action also has a crucial role to play, and the local heat and energy efficiency strategy pilots have shown just how important the role of councils and communities will be in driving the strategy forward.

The development of the national public energy agency and the national infrastructure company, in the coming years, will be a groundbreaking step towards ensuring that councils are well equipped to take, and are leading on, the action that is required to decarbonise our homes. Local stakeholders must also be part of all stages of the design and delivery of area-based schemes and strategies, and councils must be allocated sufficient funding to deliver, too.

As we have heard today, there are real intricacies involved in delivering retrofitting plans on the ground, especially around the need to ensure that local installers and tradespeople are geared up to respond. The CITB has estimated that we need to train roughly 10 per cent of the current size of our workforce in energy efficiency by 2028 in order to deliver the vision for decarbonisation, and there is an immediate need to strengthen the skills of the existing workforce to fill labour gaps and to deliver at the pace and scale that are required.

The minister spoke earlier about certainty. I say to Miles Briggs that certainty is important for business because it drives investment, establishes the long-term trajectory and creates the market that, I think, will create jobs.

Of course, there are complexities around tenure, rurality and housing type, as we have heard. From examples of models of collective purchase and of heat as a service, we can learn how to simplify and accelerate the pace of retrofitting.

I am glad that the Scottish Government has signed a memorandum of understanding with the Danish Government, because there is much to learn from the international experience, but there is also much to learn from our communities. I am a big fan of the work that the HEAT Project does in Blairgowrie, working with individual householders on their retrofitting options and how they can get the grants and loans to deliver that in a cost-effective way.

The commitment to retrofit 1 million homes by 2030 is ambitious and complicated, but that should not stand in the way of action. It is our responsibility to deliver that vision in response to the climate emergency, to tackle increasing rates of fuel poverty and to improve our health and wellbeing. That is our commitment to people and planet.

Alex Rowley is the last speaker in the open debate.

17:09  

This relatively short debate is on what is, for so many, a major issue. The level of fuel poverty in the country is unacceptable and the level of the Government’s ambition to tackle it is equally unacceptable.

The debate is also topical. Costs are increasing and the UK price cap on energy bills, which prevents companies from immediately passing rising costs on to their customers, is due to change on 1 April. The industry regulator, the Office of Gas and Electricity Markets, is set to raise the cap dramatically. Currently, more than 15 million households across the UK are protected by the cap, so there is a very real cost-of-energy crisis heading our way.

Speakers have highlighted many concerns about the Government’s approach, not least the lack of detail and the uncertainty about costs and support for people and households, as well as concern about costs being passed to public authorities and social providers of housing. I also find it concerning that there is talk of using technologies that have not yet been invented—that sounds a bit like wishful thinking.

The prospect is that we will have to have this debate again and again in the future, because we continue to build in the first instance properties that will need retrofitting in 10, 15, or 20 years’ time. Obviously, this does not apply to existing housing stock, so the need for retrofitting is crucial. Why continue to fuel the problem by continuing to build properties that will need work done on them in the future to meet our energy or carbon emission targets?

Members may be aware that I am proposing a member’s bill on introducing new minimum building standards for all new builds in Scotland. Part of the purpose of the bill is to end the need for future retrofitting of properties by building them to the absolute best energy efficiency standards right now. When we see energy prices skyrocketing, we can see why introducing such measures becomes so important. After all, the cheapest energy is always the energy that we do not use in the first place.

I know that the SNP-Green Government has said that it will not support the recommendation from Scotland’s Climate Assembly, but I have to ask the Government whether it really thinks that it makes sense to continue to build homes that we know will need retrofitting at some point down the line.

Will the member take an intervention?

I have not got time, sorry.

We could take the necessary action right now and have Scotland leading the way in the future of housing across the world. The heat in buildings strategy had a £33 billion price tag, but only guaranteed £1.8 billion of funding. Scottish households are facing the very real possibility that the cost of improvements will fall on them. That is causing real concern, particularly in the middle of a cost-of-living crisis.

SFHA modelling suggests that it will cost social landlords around £2 billion—£7,000 per property—to deliver a relatively modest impact on fuel poverty, with only 41 per cent of properties achieving the targeted EPC B rating. That is why part of the Government strategy must surely be to ensure that all new builds in Scotland are built to the gold standard. Doing so now would be so much cheaper than retrofitting those properties in the years ahead. We must be more ambitious and very clear about how we intend to deliver on such a crucial issue.

Katy Clark will make the first of the closing speeches for up to five minutes.

17:13  

I am pleased to close the debate on behalf of Scottish Labour and to welcome the committee’s work on an important issue.

The convener clearly highlighted the scale of the challenges that we have before us. One issue that she focused on is the important role of local government, particularly where councils that have their own housing stock. For example, North Ayrshire Council has installed solar panels on 500 council homes, with tenants keeping the energy savings. It has also built two sustainable demonstrator homes at Dickson Drive, Irvine, which have tested out the various technologies and, in particular, their financial benefits.

As has been highlighted in the debate, one of the big issues is where the money will come from. The backdrop is, of course, a decade of cuts in council spending. To do the work that is necessary on the required scale, we need a lot more detail from the Scottish Government about where the money will come from, so that the burden of investment does not fall on tenants’ rents and on ordinary working people.

As has been said, the cost of house building is one of the issues that need to be addressed, as does the cost to householders of retrofitting. The trend is that more people are living in older homes, so the only way to meet our climate targets is to retrofit the existing housing stock and, indeed, other buildings. The condition of much of Scotland’s existing housing stock means that, in reality, many people are locked into fuel poverty. We know that poor housing conditions are associated with many illnesses and health conditions and that domestic housing stock is, of course, a significant source of carbon emissions. We need to revolutionise both the way in which we build houses—Alex Rowley referred to that—and what we do with our existing homes.

The STUC has estimated that the retrofitting of homes could create between 32,000 and 98,000 jobs in Scotland and that the retrofitting of other public and commercial buildings could create between 8,500 and 10,000 jobs. As well as addressing the climate issues that have been considered in the debate, such actions could also have massive social consequences.

I welcome the debate and the highlighting by many members across the political spectrum of the huge challenges that need to be addressed. I look forward to the minister’s response and to the continuing debate to ensure that we meet the challenges that have been set out in the debate and that we do what needs to be done to retrofit and ensure that we meet our climate standards.

17:17  

I am grateful for the opportunity to close the debate on behalf of the Scottish Conservatives and I pay tribute to the Local Government, Housing and Planning Committee for bringing it to the chamber.

The importance and complexity of the issue have been reflected in the debate. There have been some very thoughtful contributions, but we are still only scratching the surface of the issue. The truth is that it is not possible to do full justice to the topic in one debate and I have no doubt that we will return to it on a number of occasions during this parliamentary session. Nevertheless, one thing is clear: the retrofitting of Scotland’s 2.5 million homes will be an essential step on the journey to net zero by 2045. As we know, 13 per cent of Scotland’s total greenhouse gas emissions and 30 per cent of Scotland’s energy consumption are accounted for by Scotland’s households and, as we saw in the climate change plan update, emissions for homes and non-domestic buildings in Scotland must fall by 68 per cent by 2030 to meet the target.

The heat in buildings strategy provides much-needed clarity on where the targets can be achieved, but more details and information are required in other areas. For example, a workforce in excess of 16,000 will be required to support retrofitting by 2030. Although a workforce assessment project is due to be published this year, we know that training a workforce of that size will be a significant challenge. Years of underinvestment in many areas in which there are skills shortages have already resulted in serious problems. That was debated in the chamber only last week.

We know that the worldwide labour market continues to undergo unprecedented changes. There is a shortage of skills in many areas. We also know that skills shortages will inevitably lead to certain parts of the country—rural and island communities, for example—having much more to deal with in the process.

The Scottish Federation of Housing Associations has warned that training will be required to ensure that retrofitting will take place and that accreditation has been available in Scotland only since October, which means that many companies are already well behind. Concerns have also been raised about the requirement for staff to reach Scottish vocational qualification level 6. Staff and companies will need to participate, and many rural companies have already decided not to go for the retrofitting market but have instead returned to fitting standard renovations.

The success of the heat in buildings strategy hinges on the ability of individuals to have their problems solved, but further clarity is still required. Home owners accept retrofitting, but it is not cost neutral. Regardless of the issues, there is an expectation that £33 billion in cost will need to be covered, but the Government has committed only £1.8 billion so far, so there is a massive gap.

Many members made strong speeches and I will reflect on them.

The LGHP Committee convener talked about the planning process and identified that, in many places, it might be an area of conflict. She was right to identify that planning could be a problem for the retrofit process.

My colleague Miles Briggs spoke about challenges and ambitions. There is nothing wrong with our ambition, but the challenge is in trying to meet it and to ensure that tenants and householders can achieve it. Energy bills are increasing and fuel poverty is already with us. That needs to be addressed.

Mark Griffin spoke about the cost of hitting the targets. It is important that there is money up front because if we do not have that, the targets will never be achieved. He also talked about how low-income households are at risk of being unable to afford to address the challenges. District heating systems have had a mixed response.

Liam McArthur talked about funding—£12,000 per household on average—and also said that in, rural and island communities, the cost could be much higher. We have to identify the capacity needed to deliver and ensure that we have it.

Liam Kerr spoke about off-grid homes. Fuel poverty exists now. Electricity and heat pumps might not be the best way forward. Off-grid homes are a major concern and must be considered to ensure the sustainability of forward plans.

I thank all the organisations and individuals that gave us briefings on the topic. Retrofitting Scotland’s homes will be a key element of reducing Scotland’s carbon emissions. It will require a joint effort between local and central Government, so there will have to be a meeting of minds to ensure that local and central Government come up with the goods. Home owners and landlords will require it. As we heard, there are still a number of issues to overcome to achieve that.

Conservative members will continue to push the Government to show the momentum that is required to ensure that the issues are addressed. We do not want to miss the opportunities or the targets, but it is misleading to say that we can achieve everything in the timescales that we have because that is not the case. The money needs to be available and we need to ensure that we do not leave people behind. Communities and constituents deserve the support and, if we are to achieve the targets, we have to ensure that a mechanism is in place.

The Conservatives will continue to support measures, but will also ask questions, continue to ensure that they are answered and ensure that individuals and communities are given opportunities.

17:22  

I thank everyone who has taken part in the debate. There have been a number of areas of cross-party consensus. I hope that I misunderstood the last part of the previous speech, which at some points sounded like a call for slowing down—saying that we cannot deliver on the timescale to which we are committed. Of course, the timescale to which we are committed is designed to be consistent with the climate targets for which the entire Parliament has voted. I hope that the cross-party engagement that we have is about how we do that, not whether we do it and not whether we should slow down.

The committee should be commended for its work—not only its evidence session but the constructive correspondence that it has had with me and other ministers—and for bringing the debate to the Parliament.

I will not have time to address every issue. That is partly because the topic is a cross-cutting matter, as several members mentioned. It deals with the remit of not only the Local Government, Housing and Planning Committee but the NZET Committee. It also deals with social security and skills and includes health and equalities issues. The agenda covers an incredible breadth—not just my portfolio or the remit of a single committee—so I have no doubt that there will be many opportunities to continue to discuss the issues that I do not manage to cover in my closing speech.

I want to mention some of the issues that were raised by the main Opposition parties in opening the debate. Both Labour and the Conservatives emphasised some of the current issues around energy bills, fuel poverty and the cost of living—and they are absolutely right to raise those issues. If we were in a position in this Parliament of being able to debate tariffs, levies, VAT, the price cap or the idea of a windfall tax on fossil fuel companies to provide support for the transition, we would no doubt have a lively debate, and all parties would bring their ideas to the table. Those issues are of course decided at UK level—even the issue of rebalancing gas and electricity prices, which will be important and is a matter on which we pressed the UK Government. I hope that those members who do not agree that those powers should be exercised here will work with us to press the UK Government to take the action that is necessary.

Miles Briggs and Mark Griffin raised some issues, albeit from slightly different perspectives, around the experiences that people have had in the past of existing schemes that have replaced fossil fuel with zero emission heating or of energy efficiency measures. Miles Briggs mentioned social housing tenants who had been in touch with him to say that they had a bad experience. I am aware of some cases like that; I have also visited many people who say the opposite, and who have saved more than half of their heating bills and have reliable, controllable heat as a result of air-source heat pump-fuelled heating networks.

The point is that, whatever happens in what is a multidecade programme of work, we should avoid treating either the best or the worst individual experiences as a stereotype. Even fossil fuel heating systems and other forms of home improvement have involved good and bad practice. Mark Griffin talked about “cowboys” being active in the field. I should say—because nobody else has teased him yet—that it is traditional for members to say, “Thank you to the minister for providing advance sight advice of the statement,” and I return the compliment.

On the range of technologies that Mark Griffin mentioned, our emphasis is on what are known as low and no-regret measures. As I said in my opening speech, I recognise that many of those are less familiar in Scotland, but they are tried and tested technologies that have been used successfully in many other countries. The critical thing for replicating those other countries’ experience of using technologies well in Scotland is building the skills that are needed to design, deliver and maintain new systems to the highest standard, with emphasis on supporting those who are most in need. We agree on that—it was another theme in the speeches of Mark Griffin and others. Indeed, the warmer homes Scotland scheme has helped tens of thousands of households who are most in need, saving an average of £300 per annum per household. The successor scheme must continue to do that, as well as enabling the ambitious reduction roles that Scotland has set and helping those who are in hard-to-treat properties.

Will the minister take an intervention?

That might be what Liam McArthur wants to raise.

I talked in my speech about the scale of the ambition regarding the skills development that will be required to scale up the operations for installations. There will still be a requirement to service existing boilers and so on. How will that capacity conundrum be met by the Government?

Indeed. Many of the arguments that I made in my opening speech about giving certainty to the industry and to the supply chain to invest in acquiring and sharing skills will be critical. That is why a clear, bold approach to regulation will be important.

On regulation, several members, from both an urban perspective and a rural perspective, have raised the issue of buildings with mixed ownership, mixed tenure and mixed use, including Kaukab Stewart, my constituency MSP. I live in one of those mixed-tenure, mixed-owner, mixed-use pre-1919 tenement blocks in Kaukab Stewart’s constituency, and we are very aware of their particular challenges.

Will the member take an intervention?

I would like to expand the point that I was making if I can.

The minister is in his last 30 seconds.

We are considering how those buildings will be incorporated into our approach to regulations. There might need to be differences in relation to compliance periods or the trigger points that will be used.

We are establishing a short-life working group to look at the options for the regulatory approach to tenement buildings—that is, tenements in the broadest sense—and we will follow-up the recommendations of the Scottish Parliamentary working group on tenement maintenance. Also, the Scottish Law Commission will be undertaking a law reform project with a view to producing a draft tenement maintenance bill.

Presiding Officer, I recognise that I am over time. I have not managed to touch on every issue that I would have wished to. I am sure that this will not be the last opportunity to debate what is, as I have said, an extremely long-term agenda in the years and decades ahead. Once again, I thank the Local Government, Housing and Planning Committee for bringing the debate to the chamber.

I call Elena Whitham to wind up the debate on behalf of the Local Government, Housing and Planning Committee. Ms Whitham, you have up to eight minutes.

17:30  

Before I start, I refer members to my entry in the register of members’ interests: I am still a councillor in East Ayrshire.

I am very pleased to be closing this extremely important debate on behalf of the Local Government, Housing and Planning Committee. As the committee convener said at the beginning of the debate, we are just beginning our work on the retrofitting of housing for net zero. Therefore, the debate has been immensely constructive in helping us to shape what our next steps should be on the issue.

The debate has affirmed the huge challenge that is ahead of us in meeting the Scottish Government’s ambitions for the retrofitting of housing for net zero. It has also emphasised the importance of meeting that challenge, and the significant contribution that reducing emissions from housing will make in meeting our overall net zero target.

Although we recognise the enormity of the challenges ahead of us, it is reassuring to hear from all parties today that we share a collective commitment to overcoming them.

We need to think in radical and innovative ways to meet the challenges. It has been great to hear today about the creative and innovative approaches that can be considered. As part of that, we need to think about delivering on retrofitting in a way that improves people’s lives, that enables them to live in homes that are conducive to better health and that does not push them into fuel poverty or exponentially increase rents.

The policy needs to be delivered in a manner that is consistent with a just transition. As a committee, and as a Parliament, we have a very important role to hold the Scottish Government to account and ensure that we are doing all that we can to deliver on the ambitions for retrofitting.

I turn to members’ contributions. This is the first time that I have delivered a closing speech on behalf of a committee, so bear with me, folks. The minister was right to point out in his opening speech that retrofitting housing is an immense challenge, and that it needs to be done at scale and at pace. He was also right to mention that public awareness has been raised since COP26. However, we need to raise awareness further—we must do so in the immediate future.

The committee looks forward to scrutinising the legislation that the minister mentioned. There is a real need for careful scrutiny to ensure that the public understands why change is needed, how they can make changes and how they can fund them. It is vital that the green heat finance task force, which the minister mentioned, helps to drive innovation and unlock private investment to complement the public moneys that will be available.

Miles Briggs suggested that wall and floor insulation could be an early driver for change. That would give those in rural properties, which are difficult to retrofit, somewhere to start and something to focus on, given that there are huge numbers of people in poverty in rural settings.

Mark Griffin was also right to raise the issue of fuel poverty and how it can be exacerbated by inefficient homes. The reality for many home owners is that the costs of retrofitting will be prohibitive. Therefore, the no-detriment principle is key. I share his concerns regarding cowboy builders—we saw the effects of that in previous energy efficiency schemes.

Liam McArthur underlined the issue of rural and island fuel poverty and the vastly higher costs of retrofitting in those areas. We are potentially talking about more than £17,000 for each property. We need to understand how people will be able to fund that.

Paul McLennan outlined that to reduce fuel poverty in the long term, decarbonising homes with low carbon, fuel-efficient measures will be key. He also underlined the importance of the no-detriment principle and the need for all Governments to work collaboratively on the issue.

Liam Kerr spoke about the 70,000 off-grid homes, which is a huge issue. We have had to deal with, and supply fuel pumps to, some of those in my council area. He mentioned the costs and difficulties in retrofitting such properties and spoke about how there is no one-size-fits-all approach to tackling the issue.

Fergus Ewing passionately raised the issue of his constituent who lives in a listed building—I live in one, too—and the associated issues, which the committee has already started to explore, with tensions between planning consent and retrofitting. He also raised the important issue of missing-share schemes. There are quite a lot of those schemes, including in my authority of East Ayrshire, and they will be important going forward.

Pauline McNeill reinforced the point that financial supports are required and raised concerns regarding a lack of consumer confidence in emerging and changing technologies. That is important, because consumers have to have confidence to go ahead with such big financial transactions.

Michelle Thomson pointed out, rightly, that it is an exponential challenge with a £33 billion price tag. She highlighted the need to upskill and support our small and medium-sized enterprises in order that they can help us to meet the challenge and underlined the skills shortage that we have to address, which many members talked about.

Meghan Gallacher discussed the desire to preserve our built heritage, which is important for so many of us, and how that can compete with retrofitting. Again, we need to find solutions for that.

I am sure that Elena Whitham is aware of Built Environment Forum Scotland’s tenement maintenance working group and its concerns about the pace at which legislation is being brought through, particularly with the capacity issues for the Scottish Law Commission. Looking at potential legislation is really problematic. Could we look at how we can accelerate that effort to get the legislation through as quickly as possible?

I agree with Paul Sweeney. The committee will have to be mindful of that and include it in our scrutiny work.

I have forgotten where I was. I knew that that was going to happen to me on my first time.

Kaukab Stewart highlighted that 96 per cent of her constituency is in tenemental period properties and the huge challenge that arises from that, as highlighted by her survey.

Mark Ruskell eloquently pointed out how his period property has been retrofitted numerous times over the years, as technology has advanced, but he recognised that the scale of retrofitting is a mountain in front of us.

The final contribution in the open debate, from Alex Rowley, reinforced the very real issue of the looming fuel cost crisis and the never-ending cycle of retrofitting, which was interesting coming straight after Mark Ruskell’s contribution. The issue of building to a gold standard is something that the committee will have to focus on, but we have to recognise that, because technology emerges all the time, we will see continual retrofitting regardless of getting to a gold standard at the moment. That was a very interesting contribution.

I thank Parliament for the opportunity to have the debate. I hope that by the time we come back to consider the issue in the chamber again we will do so reflecting on real progress. I hope that we will see local and national strategies that offer clear pathways to the delivery of the retrofitting agenda; that funding is in place through a combination of sources to support that delivery; that people know how to access that funding; that the public understands what is required of them and why it is necessary; that we are delivering the retrofitting agenda in a way that is consistent with a just transition; and that there is a skilled workforce across Scotland that is able to deliver on the agenda, irrespective of where someone lives.

Finally, I hope that the conversations with the UK Government on the issue of VAT on retrofit work and electricity tariffs will have progressed, thereby removing the obstacles in the way of our ambitions for retrofitting.