‘Short-sighted’ ECO cuts will hit tenants

Consultation responses reveal sector’s initial reaction to DECC plans

25/04/2014 | By Pete Apps – Inside Housing

Plans to reduce green subsidies are ‘short-sighted in the extreme’, will leave social housing tenants worse off and waste ‘significant investment’ in insulation projects.

These are the responses to a Department of Energy and Climate Change consultation which closed last week on plans to reduce energy companies’ targets to insulate the homes of poor and vulnerable customers.

The British Property Federation said the proposal to cut back the £1.3 billion-a-year energy company obligation funding ‘will increase the number of people struggling with their energy bills… It is short-sighted in the extreme.’

Similarly, a response from the mayor of London expressed ‘concern at the lack of funding likely to be available for social housing’. Boris Johnson called for the target for solid-wall insulation installations to be doubled from 100,000 to 200,000 by 2017.

Under DECC’s plans, targets for energy companies to carry out measures to reduce carbon emissions -paid for through energy bills which landlords had been banking on to cover ‘hard to treat’ retrofit works in solid-wall properties – would be cut by a third.

This would mean energy companies only need to do enough work – such as insulating social homes – to save 14 million tonnes of carbon dioxide, down from the original target of 20.9 million tonnes.

The cuts were first announced in the autumn statement and the government expects them to mitigate a £50 increase in individuals’ energy bills.

Circle said this saving would be ‘completely offset’ for residents because of the high cost of energy bills in homes without insulation.

Helen Wilson, group head of energy and green strategy at Circle, said the 60,000-home landlord had planned to use around £3 million of ECO cash to complete solid-wall insulation works on 400 homes this year. But now it only expects to receive £300,000, meaning just 30 or 40 homes could be insulated.

The National Housing Federation warned the proposals are causing landlords’ solid-wall insulation projects to be put on hold or cancelled.

It said a group of associations has cancelled solid-wall insulation work on up to 3,000 homes, having spent £50,000 on a procurement exercise while another association had ‘well-developed plans to insulate 1,800 homes’ cancelled.

A DECC spokesperson said the department is analysing responses.

What the sector thinks: consultation responses

‘This will not only leave thousands of disappointed households without insulated homes, but will also squander the potential for housing associations to deliver large-scale insulation projects.’
National Housing Federation

‘Our residents who struggle to pay their energy bills… will not see any benefit from the proposed changes to the energy company obligation and will be worse off in the long-term.’
Circle Housing

‘This approach [the proposed cuts] has a significant negative impact on the only strategy that could result in a long-term solution to rising energy bills.’
Affinity Sutton