Net Zero Review: what housing associations need to know

Natalie Turner, 24 January 2023

Back in September 2022, the BEIS Secretary of State commissioned an independent review of the government’s approach to delivering its net zero target, to ensure net zero is delivered in a way that maximises growth opportunities.

At the NHF, we responded to the call for evidence, sharing our views on the whole economy transition, maximising net zero growth opportunities, the challenges to address in this review and the future of net zero.

It is our view that reaching net zero is a generational opportunity to increase energy security, protect residents from fuel poverty and create new jobs. While there may be short term costs associated with retrofit programmes, the medium and long term effects are highly beneficial to the UK economy.

Chris Skidmore has now published his net zero review findings, making 129 recommendations to work towards reaching net zero carbon emissions by 2050 while maximising economic investment, opportunities and jobs. Skidmore’s findings cover key areas including energy efficiency, skills and the decarbonisation of our homes.

The net zero review is split into two parts, with the first emphasising the benefits of net zero for the economy and the second setting out how we can achieve our 2050 commitment.

While the review covered every area of the economy, from the role of business to making use of infrastructure, Skidmore’s proposals emphasised the need to deliver energy efficient homes. The review suggests that this will have an immediate, short term benefit, making homes warmer and reducing energy bills as a result. In the longer term this has the potential to grow the economy and create hundreds of thousands of new jobs in every region and community across the county.

The review makes a number of recommendations around net zero skills, including calling on the government to publish an action plan setting out when, where and in which sectors there will be skills needs specific to net zero. The development of a strategic, national retrofit strategy would help the social housing sector reduce carbon emissions by addressing specific challenges around skills development for retrofit works.

Energy efficiency was another focus of the review, with Skidmore making recommendations around reforming EPC (the way the energy efficiency of a home is measured and expressed), suggesting that the government should mandate that EPCs are updated on a regular basis. He also suggested the introduction of a new metric to account for wider benefits from low carbon heating systems. Skidmore also noted the need for certainty around the phasing out of gas boilers, recommending that the proposed date of 2035 is brought forward to 2033.

Skidmore also acknowledged the link between the planning system and our ability to meet our net zero goals. He recommended that central government should reform the local planning system and the National Planning Policy Framework (NPPF) now, putting a greater emphasis on net zero. He also suggested a rapid review of the bottlenecks for net zero and energy efficiency projects in the planning system, ensuring that local planning authorities are properly resourced. We know that issues related to planning can act as a barrier to housing associations accessing and making use of funding pots like the Social Housing Decarbonisation Fund.

If acted upon, Skidmore’s recommendations could enable organisations to make better use of existing funding pots, speeding up retrofit works and contributing to us achieving the national net zero target. The government is currently consulting on an updated NPPF, and as part of our response we will be making a strong case for it to give more priority to energy efficiency works within the planning system.

Finally, the review recommends that the government provide long term funding certainty for net zero priorities. This is something we have called for at the NHF. We welcome the £6bn in energy efficiency funding announced in the Autumn Statement that will be made available from 2025 to 2028. However, if the remainder of the £3.8bn of the Social Housing Decarbonisation Fund was released up to 2030 it would enable organisations to bid for larger, longer term projects, providing additional certainty across the retrofit sector. Skidmore’s review highlights the importance of long term policy commitments to facilitate the success of net zero priorities and provide opportunities to save money. It recognises that long term certainty and funding is vital to achieving carbon reduction goals.

Overall, Skidmore’s review underlines the importance of the 2050 net zero target, and of continued investment in housing, among other areas, to achieve this. The review gives the social housing sector a lot to think about as we continue to plan and deliver retrofit and carbon reduction strategies. We hope to see further support implemented to assist the housing sector on our mission to reduce carbon emissions as the government takes stock of the review.