Fourth Report - Energy Efficiency of Existing Homes

The government acknowledged the challenge and stated its commitment to improving homes to EPC Band C by 2035, outlining ongoing actions such as consulting on minimum standards for private and social rented sectors and committing to review owner-occupied regulations in 2021.

The government clarifies that its £35-£65 billion estimate focuses on achieving EPC C where practical, and does not cover full decarbonisation of homes and non-domestic buildings, which would indeed cost significantly more. They reference external estimates from the CCC suggesting much higher costs for full decarbonisation.

The government acknowledged the recommendation by reiterating its commitment to the existing EPC band C by 2035 ambition, stating it believes it offers good value. It also noted the Heat and Buildings Strategy would set out policies for the 2020s, but did not commit to reviewing feasibility or increasing ambition.

The government states its cost projections are continually reviewed and informed by consultation, and no homes are considered out of scope under its definitions. It will publish a Heat and Buildings Strategy in due course to address actions for reducing emissions from buildings, including safeguards for properties that cannot reach energy efficiency aspirations.

The government acknowledges concerns about ECO's impact, stating ECO3 focuses on low-income households, and a £4bn scheme aims to meet fuel poverty targets. It intends to design ECO to complement other funding sources, explains why blending for the same measures is limited, and highlights the expanded Warm Home Discount and Social Housing Decarbonisation Fund as additional support.

The government states it will publish an evaluation report for the Energy Company Obligation (ECO) later this year, addressing the recommendation to review its value for money. However, it implicitly defends the current funding mechanism via energy bills, rather than committing to a review of its appropriateness or fairness.

The government commits to publishing a call for evidence to initiate a strategic dialogue with consumers and industry on affordability and fairness, including the balance of levies on electricity versus gas bills, to address current price signal distortions and encourage decarbonisation.

The government reiterates the Home Upgrade Grant's focus on worst-performing low-income off-gas grid homes, confirms £150m has been committed, and outlines other complementary schemes like ECO, SHDF, and the Clean Heat Grant that provide broader support for upgrading homes.

The government committed £150m to launch Phase 1 of the Home Upgrade Grant after December 2021, addressing the timing and setting out a central role for local authorities in delivery via a competitive bidding process, but notes further multi-year funding is subject to future fiscal events.

The government acknowledges the Green Homes Grant Voucher scheme did not deliver as hoped, leading to its closure to new applications, and accepts it faced delivery challenges, while defending the initial swift rollout for economic stimulus and industry engagement.

The government rejects the conclusion that anti-fraud protections were complex, stating they have a duty to prevent fraud and that delays often had legitimate reasons, while acknowledging the scheme's closure and efforts to resolve processing issues.

The government rejected the recommendation, explaining that the voucher portion of the Green Homes Grant scheme was closed due to significant challenges, with funding redirected to reform and expand the more successful Local Authority Delivery element.

The government is undertaking a Net Zero Review and plans to publish a Heat and Buildings Strategy shortly to outline its long-term strategic approach. It has also made specific multi-annual spending commitments, including increasing the Energy Company Obligation to £1 billion per year from 2022, allocating £2.5 billion for Home Upgrade Grants, and a £3.8 billion Social Housing Decarbonisation Fund over 10 years.

The government states the National Audit Office is currently undertaking a comprehensive review of the Voucher scheme with Treasury participation, due in early July, in addition to an independent evaluation by Ipsos MORI.

The government acknowledges the committee's positive assessment of the Green Homes Grant Local Authority Delivery scheme and local authorities' role, confirming it is closely monitoring project delivery.

The government has allocated an additional £300 million to the 5 Local Energy Hubs to deliver energy efficiency upgrades to 30,000 homes by December 2021, expanding funding and local authority involvement.

The government details the Social Housing Decarbonisation Fund (SHDF) Demonstrator project, confirming £62m funding was awarded to 19 projects to improve over 2300 social homes, and explains that insights from this will inform the design of the longer-term SHDF.

The government has allocated £60m and an additional £300m for energy efficiency schemes in 2021/22, with the Social Housing Decarbonisation Fund (SHDF) intended to be open to all social housing landlords, but will continue to seek further funding.

The government agrees that energy efficiency is a long-term solution but defends the Warm Home Discount as a key policy for immediate support, stating they will continue the scheme with increased spending and will consult on improving its targeting. They do not commit to reallocating funds to Home Upgrade Grants or the Energy Company Obligation as recommended.

The government acknowledged the need for long-term certainty for industry and households, stating that the upcoming Heat and Buildings Strategy will outline its approach. It also highlighted ongoing efforts to address the skills gap, including the Green Homes Grant Skills Competition and plans to upskill over 7,000 heat pump installers annually.

The government stated its commitment to creating 2 million green jobs by 2030, highlighting the Green Jobs Taskforce and existing significant funding for training initiatives, including the Green Homes Grant Skills competition and various educational programmes.

The government is working with the Green Jobs Taskforce to produce an Action Plan for Net Zero skills and is actively collaborating with industry and education providers to increase the number of trained heat pump installers. They expect industry to be able to upskill over 7,000 installers per year by the end of 2021 and are also contributing to a broader skills analysis by CITB.

The government welcomes the Committee's support for minimum energy performance standards across all tenures and lists specific actions taken or committed to, including consulting on strengthening standards for the Private Rented Sector (2025/2028), committing to consult on social housing standards, and committing to consult in 2021 on regulatory measures for owner-occupied homes.

The government committed to reviewing the Decent Homes Standard for social housing, with part one underway, and stated that the level of ambition for a new standard will be set as part of this review, taking into account other tenure standards.

The government is committed to the aspiration of upgrading as many homes as possible to EPC Band C by 2035 and will consult on regulatory measures this year, recognizing the need for exemptions and for addressing risks of a two-tier mortgage market.

The government agrees green finance is critical for improving home energy performance, confirms their consultation on improving home energy performance through lenders closed in February 2021, and states they will review responses to develop further proposals.

The government agrees on the need for various financial products and is exploring options for the UK Infrastructure Bank, whose mandate is under development. However, trials of Stamp Duty rebates for energy efficient homes are explicitly not under active consideration due to concerns about tax revenue.

The government acknowledged the conclusion, explaining that it was inappropriate to comment on the Green Homes Grant scheme in the Budget due to ongoing performance issues, and subsequently announced the closure of the voucher scheme on March 27th.

The government rejected the recommendation to reduce VAT on refurbishment labour and expand the scope of reduced VAT on Energy Saving Materials, citing significant additional pressure on public finances and the need to balance tax revenue with public spending or other taxation.

The government rejects piloting stamp duty rebates for homeowners, reiterating previous reasons. While agreeing on the need for various green finance products, they refer to existing support through the Green Home Finance Innovation Fund, ongoing engagement with lenders to consider additional support, and exploring options for the UK Infrastructure Bank. They also commit to consulting on regulatory measures for owner-occupied homes this year.

The government agrees consumer awareness is vital and has engaged with stakeholders and consulted on improving access to information, stating they will consider responses for ongoing policy development.

The government agrees on the importance of ensuring Energy Performance Certificates (EPCs) align with policy objectives and legally binding targets, but the response is incomplete regarding specific overhaul actions.

The government agreed with the committee on the importance of aligning Energy Performance Certificates (EPCs) with policy objectives and legally binding targets, but the provided response is truncated and does not detail specific actions to overhaul the methodology.

The government acknowledged the potential of Building Renovation Passports, stating it is open to considering them and is currently engaging with industry stakeholders to explore potential mechanisms for their development.

The government's response discusses embodied carbon and the Industrial Decarbonisation Strategy, but does not address the recommendation to develop a methodology and data framework for Building Renovation Passports or their proposed replacement of EPCs.

The government's response discusses public procurement reforms and the Industrial Decarbonisation Strategy, which does not address the conclusion about the essential nature of a bespoke advice service on energy efficient retrofitting.

The government acknowledged the growing use of its Simple Energy Advice service, stating that any future development will be based on an iterative process of user testing, but did not commit to upgrading it to a specialist bespoke service similar to Home Energy Scotland.

The government recognises the importance of reducing embodied carbon and increasing the use of low-carbon materials in construction. They refer to the Industrial Decarbonisation Strategy, which outlines how industry can decarbonise and includes consideration of new policy approaches to support the market for low-carbon industrial materials.

The government is reforming public procurement policy through new legislation and a National Procurement Policy Statement to embed national priorities like tackling climate change. This framework, alongside actions from the Industrial Decarbonisation Strategy, will enable the public sector to drive demand for green products, including sustainable materials in contracts.