Appg for ebe inquiry into Sustainable Construction and the Green Deal First Session 15 April 2013

APPG for EBE - Inquiry into Sustainable Construction and the Green Deal

First Session - 15 April 2013

Evidence given by:

 

• 
  UK-Green Building Council – Richard Griffiths, Anna Surgenor
  
• 
  The Royal Institution of Chartered Surveyors – Martin Russell-Croucher
  
• 
  Natural Energy Efficient Sustainable Project – Keith Baker, Rohinton Emmanuel, Norry McBride, Stuart Thompson, Tom Woolley
  
• 
  The Alliance for Sustainable Building Products – Simon Corbey, Tom Woolley
  

UK Green Building Council

Anna Surgeon, Richard Griffiths

The UK Green Building Council set out what they see as the key barriers to sustainable construction. These are:

• 
  Lack of leadership from the Government
  
• 
  Lack of leadership from industry
  
• 
  Lack of collaboration within industry
  
• 
  Lack of evidence base and business case
  
• 
  Confusing language and complexity
  
• 
  Absence of a clear plan
  
• 
  Lack of capacity and skills
  
• 
  Lack of incentivisation to stimulate demand
  
• 
  Perceptions of high cost.
  

Overcoming these barriers will require concerted and co-ordinated, sustained effort from the Government and the private sector.

They both felt that there were too many regulations, often created merely for the sake of regulation. But they also said that it is important to have long-term targets, as these do drive action, as well as innovation in the supply chain. They said they are in favour of the 2016 zero-carbon target.
With the Green Deal, they praised the Government for its huge leadership role. They think that although the Green Deal is “perfect” , it is basically sound. They applauded the fact it overcomes the significant barriers of upfront capital and acknowledge that it has already had a significant impact on stimulating the domestic retrofit market.
However, this must not be used as an excuse by the Government to rest on its laurels as there are still huge challenges.

Their major concern to date is the lack of demand. They would like long-term incentives over and beyond cash-back.

It also has been pointed out that the Green Deal is just one part of the energy market. In the non-domestic sphere, there has been less progress. They think that the Minimum Energy Performance Standards (MEPS) from 2018 will provide a powerful driver, and they think this will present an opportunity to harmonize across the EU market, using one tool. This would be a great advance, as there are too many standards at present.
RICS

Martin Russell-Croucher

Martin Russell-Croucher pointed out the new build comprises a mere 1% of the total building stock, and much more focus is needed on existing properties (70% of which will still be in place by the 2050 deadline for an 80% reduction in CO2).

There is a real problem with solid wall construction and it would only take a few problems to put the whole market off.

One of the problems with persuading owners of commercial properties to embrace sustainability is that energy costs are only a small part of a company’s overall operations. Hence, it is vital to persuade businesses of the benefits to be gained via energy reduction.
The problem is the same with the domestic market. Sustainability is a long way down the list of home owners’ concerns.
In respect to the Green Deal, the market is being held back because SMEs need to make a significant upfront investment in staff and training. The experience of Home Information Packs, which were scrapped by Government, has also had a deterrent effect.
However, RICS is very supportive of the Green Deal – as it provides a quality assured means of getting advice on energy efficiency and the measures installed and solves the “landlord pays but tenant benefits” issue.
That said, RICS has concerns over the low/no cost of the Green Deal Advisory Report, as well as the perceptions over an “attached” loan on resale (will it ever be repaid?). It believes a stronger incentive is needed to accelerate take-up, as at present, we are relying too much on persuading people “this is a good thing to do”.

The Alliance for Sustainable Building Products (ASBP)

Tom Woolley, Simon Corbey

Progress on sustainable construction has been obstructed and distorted, claimed the ASBP, by too great a focus on energy generation and building services. Admittedly, these are important issues, but have distracted attention from the importance of “Fabric First” and embodied energy and the potential contribution from environmentally friendly low-impact natural, renewable and low impact building materials. They have low embedded energy, the thermal mass to store heat, are safe, healthy and breathable and do no damage to the environment.

ASBP research into sequestered carbon has shown that bio-renewable materials typically have a carbon content of between 40-50%.

By 2020, said the ASBP, sequestered carbon in construction products could account for 90% of DECC’s carbon reduction target for homes and communities and the embodied energy of products could be 40% of the lifetime energy use of a new building – the carbon spike.
Renewable materials are now widely available and price-competitive. Mainstream organisations, such as M&S, have adopted materials like hempcrete in their Plan A. To reduce CO2 quickly and now, these products need to be produced in the UK rather than imported, as at present.
Natural and renewable materials should play a big part in the retrofitting of buildings under the Green Deal, said the ASBP.

University of Ulster

Dr Norry McBride

Dr McBride outlined the scope of the NEES Project (NEES: Natural – Energy Efficient – Sustainable), which has examined issues relating to sustainable construction and energy efficiency in Northern Europe.
Barriers to the progress, according to NEES, include:

• 
  Wide geographical dispersion of the sustainable building industries hinders the sharing of knowledge, expertise and contacts.
  
• 
  Poor maintenance of sustainable building infrastructures.
  
• 
  Serious deficiencies in traditional and sustainable building skills, which pose major problems for maintenance, retro-fitting and new build.
  
• 
  Lack of conclusive data, which makes it difficult to compare accurately the whole-life carbon costs of different materials.
  

Suggestions for overcoming these barriers include:

• 
  Funding the development of regional knowledge-exchange hubs, to help manage support for the sustainable construction industries.
  

• 
  Encouraging new education initiatives and awareness-raising activities around both, the benefits of using sustainable materials and the demand for skilled employees.
  
• 
  Updating building regulations to place a higher emphasis on sustainability and energy efficiency.
  
• 
  Developing the supply of locally-sourced sustainable materials and encouraging consumers to select them, in order to minimise carbon transportation costs.
  

Q&A
Q. Nick Raynsford MP

There appears to be an absence of market pressures to promote sustainable housing. The UK Green Building Council indicates that there is some progress in the commercial sector. But the values of residential buildings do not reflect energy efficiency improvements; The Green Deal is like pushing a stone up hill. So how do we influence market values in the residential sector to ensure that energy efficiency of the property and, therefore, how much it costs the occupants to run the property is better reflected in values?
A. UKGBC, Richard Griffiths

Things are starting to move in that direction; I have been told by estate agents that buyers are putting energy efficiency now at 2 and 3 place, in terms of priority, when looking for homes. It used to be at number 13. It’s not yet reflected in property prices – but we’re not far away from that. It may be that the government could give some sort of tax incentives for energy efficiency.

Q. Nick Raynsford MP

What you’re saying is that government should intervene because the market isn’t sending the right signal? That is expensive. Government ends up putting a lot of money in, as with solar panels, and then finding it’s too expensive and having to cut it, sending very mixed messages to the market.

What might be the other ways for government to intervene?(Refers to the commercial sector where after 2018 a landlord won’t be able to let a property unless it reaches level D at the EPC scale.) That’s an incredibly powerful driver. Could we say that; by a certain date, unless property is at a certain level, it would be subject to a penal rate of council tax, in order to provide power driver? That’s politically very difficult but I can see that as being much more effective than stepping in, to provide a substitute subsidy.
A. UKGBC, Richard Griffiths

You could have an over-arching narrative – could make it fiscally neutral.

Q. Jack Pringle

Green Deal doesn’t seem to be well known about by the public at large. Would it make sense for the Government to market it to the public, to help it get off the ground?
A. RICS, Martin Russell-Croucher

Government needs to be encouraging people about the importance of energy efficiency – and why it’s better to have an energy efficient house and get people to start changing their behaviour. The green deal is a complex process and puts people off.

APS Too much emphasis has been put on technology in recent times and not enough on energy efficiency. A low energy house is affordable, and we can achieve this by concentrating on the fabric, which hasn’t received enough attention.
Q. Andrew Stunell MP

There are no building regulations that require the installation of electric wiring in houses. There are requirements if you do; what you do; but no requirements to, in fact, have any.

If this debate has taken place 100 years ago, it would have been: shall we put in electric wiring or not? Not driven by government regulation but by realisation you couldn’t sell the house, unless it had electricity.

It strikes me that getting to that level would be the holy grail.

Are there any ideas how to get to create that kind of culture, where people will pay serious money for energy efficiency.

Question to RICS – how much influence are you [RICS] having on the profession, because there are elements of the profession that have not bought into being green.
A. RICS, Martin Russell-Croucher

We are doing a lot to educate our members. But we have a diverse membership. We are producing sustainability guidance, including two papers for our valuers on sustainability.

Oliver Colvile MP

The Government is not going to write a cheque to solve problems.

Q. John Alker

Valuations in the domestic sector can make or break the Green Deal. What impact do you think the RICS can have on that?
A. RICS, Martin Russell-Croucher

Valuers can only reflect the market – so they can’t reflect if there is no market evidence. They can explain benefits to the purchaser, but what they can’t do, because it contravenes our regulations, is say: just because it’s got x and y its worth more. Professional indemnity prevents us from doing that.

Q. Oliver Colvile MP

When people buy properties, do you think they should be told the revenue costs as well as capital costs?
Q. John Alker

Are you providing estimating tools to agents, to help them make judgements? About sustainability and Green Deal?
A. RICS, Martin Russell-Croucher

But we have to have comparable properties to compare prices with.

Q. Peter Bonfield OBE

What’s stopping your products being taken up?
A. Alliance for Sustainable Building Products (ASBP)

Cost. But we need to start thinking about sequestered carbon (one building 250 tonnes of carbon). We need to start measuring these numbers.

Q. Sir John Armitt

Nothing I’ve heard anyone say this evening makes me think there is likely to be any progress in terms of making existing stock more energy efficient because energy is so cheap.

The view is why should I do anything about it? The majority of people will think why should I let someone come into my home, cause a lot of disruption, for something that I will never see any money in my pocket at the end of it?
As a director of Berkeley – what sells is quality and location of homes not energy efficiency. But new property is not what we need to be talking about.
I cannot think of anything I’ve heard that suggests that 17million existing properties are going to be changed significantly to increase energy efficiency.

Q.Patrick Bellew

There are 10,000s of very similar houses in towns around the country. I appreciate location is always going to be the number one selling point; but what we have the opportunity for is differentiation.

We have to get the point where energy becomes a differentiator between the two similar houses on an estate in Basingstoke.

I think that’s where the lever is; as long as the RICS goes on doing surveys which proves energy isn’t the prime driver – which we all know anyway. What we have to accept is energy is 3/ 4^th on the list. We can’t effect location;
What we have seen in commercial market is that low energy helps sell quicker or rent it quicker; so that’s the message we need to be getting out; that energy efficient houses will sell/ let quicker. So what the RICS needs to do is start a database of its members to find out if that’s happening, not in three years. You’ve got to start collecting evidence and asking slightly different questions.
Q. Oliver Colvile MP

Should the Government be getting the affordable sector to improve energy efficiency – are benefits going to pay bills?
Andrew Stunell MP

There are more people in private rented sector than in affordable – so whatever you do has to work in both sectors.
Spending £11bn a year on housing benefit and better ways to spend it if you could start from scratch; but in the meantime got to find some way of bridging that gap.
Q. Oliver Colvile MP

When you use natural materials – how can you make sure it looks modern and not tired?
A. ASBP

There’s been a huge loss of traditional skills – if we don’t save them in next 10-20 years, they will be gone.

We are worried that buildings we are putting up will have problems down the line, because we are not allowing buildings to breath. That’s why natural materials have such a big role to play, because they are breathable; but at the moment having to export them from Europe makes them expensive.
Q. Jack Pringle

It seems to me that what’s being described tonight is a massive problem. The issue is the existing domestic stock – both on the demand and supply side.
Interest rates are historically low; energy prices historically high. You’d think if it were going to happen, now would be the time.
Double glazing and uPVC windows swept the country some years ago – why did that happen?
Yet people don’t seem to want to put any premium on carbon; also the other side is that there is a lack of skills and people are scared of having builders in the house.
A. UKGBC, Richard Griffiths

I don’t think the picture is quite so desolate as it has been painted; there is an increasingly growing market for these things. I think we are close to a resolution. There is no one silver bullet. Energy bills are going up – and not far away before they start to bite.

Easy to say people don’t want to have disruption in their homes – but we are a nation of home improvers.
Patrick Bellew

The thing about the Green Deal is that its not zero up front costs; I rang around and initial assessment is £200- £400. To a man they say real issue who pays for the initial assessment. They say that’s stopping the market. Because if you are saving energy but not saving any money people are asking why do I need to put money up front? You can put the assessment cost into the mix if you go ahead; but if you don’t then you are liable for costs.

Ends