Green Deal needs to work for social tenants, Federation says

Published on Thursday, 24 November 2011 11:15
Posted by Scott Buckler

Responding to the launch yesterday (Wednesday, 23 November) by Energy and Climate Change Secretary Chris Huhne of the Green Deal and ECO consultation, the National Housing Federation pledged to work with government, energy companies and others to help further shape the proposals so social landlords can continue to tackle fuel poverty and cut carbon emissions

The Green Deal is a major commitment in the Coalition Agreement to a new approach to funding and delivering energy efficiency improvements. A Green Deal provider will fund and install measures at no initial cost to the occupier or owner. The costs would be repaid over a period of up to 25 years through a charge which would be fixed to the meter point and transfer to new occupiers and owners if residents move.

The Green Deal will be subject to a ‘Golden Rule’ under which the charge will be no more than the estimated reduction in bills resulting from the improved energy efficiency of the property.  All domestic energy customers will pay through their bills for an Energy Company Obligation (ECO) which will provide funding for households at risk of fuel poverty or where the total cost of the work would exceed what is financeable under the Golden Rule. Rigorous standards for assessing properties and for installers and materials will ensure consumers are protected.

Yesterday’s document shows that the Government has to a degree listened to the arguments the Federation and the sector have been making that social housing can play a big part in making the Green Deal work. And, that predominantly low-income social tenants, who will contribute to the cost of ECO subsidy through their bills, also need to benefit from it.   However the sector needs to work hard with government over a very short (8 weeks, closing 18 January) consultation period to make sure that Ministers take final decisions about the detailed rules on Green Deal and ECO with a proper understanding of the position of social tenants and the way investment in social housing is funded and delivered.

Responding to the consultation, Federation Chief Executive David Orr said: ‘The Government seems to be in two minds about the Green Deal and social housing. On the one hand, it recognises that a fair share of the ECO subsidy needs to pay for work in social housing, if the subsidy system is not to be distributionally unfair. Yet, on the other hand, the document contains the unhelpful and misleading claims that social housing has benefited disproportionately from subsidy up to now and that the Decent Homes programme has largely sorted, or will sort, energy efficiency in the sector.

'We will be arguing strongly both that social landlords should have access to the fuel poverty element of subsidy, since fuel poverty has a higher prevalence in social housing than any other tenure. We will also be stressing  that the carbon reduction element of subsidy should not be limited to a narrow definition of solid wall stock, but should be open to any build type which is expensive to make energy efficient. Drawing on the expertise of the Green Deal Social Housing Sub-group, which DECC have asked us to lead, we will also be looking at what is proposed on assessment and installation, to make sure it works for social housing tenants and landlords, and making proposals on ensuring activity and supply chains don’t atrophy in the transition into the new arrangements.’


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