Housing Industry Leaders Issue 09

The Clock is Ticking: Fix Fire Safety Defects or Face Ban

Developers have around a month to sign new cladding contracts

As the Bank of England set a more positive outlook for the housing sector, Housing Industry Leaders explores what this means for the sector and housebuilders' shares.

In this issue, Housing Industry Leaders analyses how the sector can make changes to social infrastructure across the UK, how phosphate pollution is hampering housing projects in Wales, and how the UKGBC's Net Zero Carbon Buildings and Infrastructure Explainer Guide aims to help the sector.

With a specific focus on how the social housing sector can expand its housing stock faster, Housing Industry Leaders dives into the most topical discussions and debates about the future of the housing industry.

Floyd March

housingindustryleaders.com

f.march@peloton-events.co.uk

Contents

P.4

Lack of Social Infrastructure: The Elephant in the Room

P.8

Phosphate Pollution: Welsh Housing Sites at a Standstill

P.10

The Clock is Ticking: Fix Fire Safety Defects or Face Ban

P.12

Bank of England Interest Rates: Housebuilders Shares Improve

P.14

UKGBC's Net Zero Carbon Buildings and Infrastructure Explainer Guide

P.16

Top Ten Ways AI can Improve Your Cyber Security

P.17

Cloudview

P.18

CAME Entrotec

P.19

Housing Cymru: Rt Hon Mark Drakeford MS Announced

P.20

Housing Cymru Event Highlight

Multimedia Editor Floyd March

Multimedia Journalist

Chelsea Bailey

Graphic Designer Edward Boustred

Lack of Social Infrastructure: The Elephant in the Room

As the cost of living crisis continues to grip the UK and debates around whether levelling up funds failed to go to the areas that need it most, a new discourse has risen about how to best support these communities and promote economic renewal.

Within this debate, there has been a large tendency to champion investment in tangible infrastructure as the surest way of attending to spatial inequalities. In a recent report, the Bennett Institute for Public Policy argues that investing in social infrastructure may be equally important for rebalancing the prospects of the UK’s nations, regions, cities and towns.

Before divulging the core aspects of social infrastructure and the long-term impacts on communities, the Townscapes report explained: “The physical spaces and community facilities which bring people together to build meaningful relationships – has been widely discussed in economic and policy circles in recent years, but its value is yet to be articulated in a robust way. We draw on a wide body of evidence to demonstrate the economic, social and civic value that these community facilities create.”

Polarised debate only embeds pre-existing issues

Naturally, debates between two different ways of building infrastructure can cause a polarised discourse. The report aims to find some middle ground between the two and argues: “Rather than seeing investment in social infrastructure as a rival to investing in large-scale infrastructure projects in areas like transport or digital, policymakers should

be more focused upon strategic planning that brings together and better aligns these different kinds of infrastructure.”

While the report focussed on social housing, it also took a step back to view cities with more of a holistic approach. Town centres are struggling to respond to a cocktail of pressures, including the pandemic and the rise of online retail. In this context, the libraries, cafés, cinemas, pubs and heritage assets on our high streets are becoming increasingly important in attracting people to the high street.

The report continued: “These amenities help to drive higher rates of footfall and incentivise shoppers to spend more in the local economy. They are also key to creating the vibrant atmosphere and sense of vitality that will encourage some people, who might otherwise leave, to stay in their home town, while also attracting innovative and productive individuals from other places.”

Focusing on employment: “Almost 2.3 million people are employed in social infrastructure-related industries in Great Britain. These industries provide almost half of all jobs in some towns. These sectors are also key sources of employment and training for those who might otherwise struggle in the labour market.”

Approximately 700,000 young people in the UK are employed in occupations linked to social infrastructure, and over 60,000 disabled people work in pubs, bars and clubs. The report then continued to break down the importance of social value community resilience, public health, bridging divides, and civic value identity and participation.

Social value continues to dominate discourse

Each section was broken down as follows:

Social Value Community Resilience: Communities with better social infrastructure find it easier to respond to, withstand and recover from crises. During the pandemic, towns with more community facilities tended to have a higher number of mutual aid groups per head of population. These facilities have also provided direct support for local communities during the pandemic, with libraries, community centres, football clubs and local pubs reaching out to help vulnerable and isolated residents.

Public Health:

The availability of social spaces can improve both physical and mental health. Access to green space is associated with lower rates of depression, anxiety and obesity. Community facilities help to mitigate loneliness and social isolation. Places with more social infrastructure facilities tend to have a lower rate of predicted loneliness among older residents. As social isolation and loneliness are associated with multiple physical and mental health conditions, investment in social infrastructure is likely to yield significant longer-term savings in health-related spending.

Bridging Divides:

Village halls, community centres, local pubs, and public gardens bring people together from different walks of life. They are, therefore, essential to building greater levels of trust and cohesion between the diverse sections of a community and can help to ameliorate tensions across generational, ethnic, class and religious boundaries. Bridging these divides helps to create local economic opportunities, as well as stronger communities.

Civic Value Identity and Participation:

When public facilities are well-maintained, accessible, attractive and safe, they shape residents’ feelings about the identity, heritage and standing of their town. But when the local pub is shuttered, the park is unkempt, and the high street has been hollowed out, the pride of a once close-knit or industrially strong community can give way to pessimism and disenchantment. At the same time, people’s participation in the social, political and civic affairs of their community often depends on the presence of social meeting places.

Continued on page 06

Four key recommendations to address social infrastructure gaps

Key recommendations given the wideranging benefits that social infrastructure can deliver, the government should consider how best to support the expansion and revitalisation of these facilities, especially in those towns where the number of public meeting places has dwindled to precarious levels in recent years. They discuss a number of policy ideas in this area, including:

1. Improve the availability of data on social infrastructure. Current efforts to improve the provision of social infrastructure are hampered by the fragmentary nature of the available data. Government should work with ONS to develop a digital data repository, bringing together key data sets relating to community facilities and their levels of use.

2. Boost funding for social infrastructure. Funds dedicated to levelling up reflect ingrained assumptions about the relative importance of physical infrastructure projects. Government should commit to ring-fencing 25% of the Levelling Up, and Towns Funds for investment in social infrastructure and should also earmark a portion of the Dormant Assets Fund for this purpose. Government should also seek to incentivise others, including those in the private sector, to invest in this area.

Public Policy

3. Develop a strategy for social infrastructure support. Central government should work with local and devolved authorities to devise a coherent social infrastructure strategy that establishes support for community facilities as a key pillar of the post-Covid recovery agenda. This might involve expanding the remit of both the National Infrastructure Commission and the National Infrastructure Bank. Local bodies should also be supported to develop their own social infrastructure strategies and to share best practices.

4. Restore town centres. The UK government should revisit its recent decision to allow developers to convert vacant retail premises, cafés, and other community facilities into residential properties. Allowing community and leisure spaces to be converted into private residences will hollow out town centres, damaging the quality of community life and diminishing the overall attractiveness of some towns. Government should instead consider how to breathe new life into these amenities.

We also disaggregate, and discuss separately, the many kinds of value that good-quality community infrastructure can yield.

Bennett Institute

Phosphate

Pollution: Welsh Housing Sites at a Standstill

After extremely high phosphate levels were found in rivers across Wales, the latest figures from the Community Housing Cymru (CHC) highlighted that nine housing associations had been impacted negatively since 2022.

A total of 28 affordable housing sites are now at a standstill, meaning over 1,000 affordable housing developments aren’t going to be delivered on time, exacerbating the housing crisis issue in Wales.

In January 2020, Natural Resources Wales (NRW) set stricter targets for phosphate levels for all rivers that are Special Areas of Conservation (SAC) across Wales. This was tightened further in January 2021.

The review followed evidence from the Joint Nature Conservation Committee that warmer and drier weather, predicted as a result of climate change, could reduce river flows during the summer and therefore increase phosphate concentrations. It is also based on new evidence about the damaging effects of phosphates on water ecosystems and species.

Tighter pollution compliance targets hindering housebuilding across Wales

The CHC explained: “At present, over 60% of waterbodies in Wales fail against the tighter targets, and Welsh local planning authorities are being asked to take more action to avoid further deterioration of the environment. It means any proposals for development within SAC river catchments - in particular, those that will generate increased volume or concentration of wastewater - must now prove that the design will not contribute to increased phosphate levels.”

Phosphates are nutrients that occur naturally in low levels and are necessary for the healthy functioning of rivers, but increased impacts of climate change have caused higher levels which are damaging to wildlife as they lead to a growth in algae.

The disruption, spanning months, has deterred housebuilders from considering sites close to the affected areas, which can cause issues to the pipeline of affordable housing delivery in the future.

One Welsh association expressed concerns that nearly 400 homes cannot enter planning stages due to the phosphate issue.

Laura Courtney, Head of Policy and External Affairs at CHC, said: “More than ever, the people of Wales need highquality, safe and affordable homes. If we are going to address the Welsh housing crisis, we need to build more social homes across the whole country.

Balancing the needs of the public and the planet proving difficult

“Delays to development in the areas affected by this issue impacts not only those that are in need of social housing but the communities that housing associations work hard to support. This is why we have been pushing for short and long-term solutions that protect the environment while allowing houses to be built.”

In order to help developers determine whether phosphate levels are safe in specific areas, the CHC launched a nutrient budget calculator.

They explained: “This tool enables you to calculate the phosphate levels that a proposed residential development in Carmarthenshire could produce. This is an important first step in allowing nutrientneutral development to proceed and is the first of its kind launched in Wales.”

This is a free resource designed specifically for Carmarthenshire; it will support developers in understanding the impact of development and will allow them to confirm the proposed development’s phosphate budget and consider mitigations.

Nutrient budget calculator to support housebuilders and developers

The CHC noted: “Although it is not required that you use this calculator, we strongly encourage you to do so. Any applications submitted using alternative calculators will be subject to additional scrutiny to determine their relevance to conditions in Carmarthenshire.”

Various methods to reduce levels of phosphate in rivers have been deployed, with varying levels of success. The most common practice is to add chemicals, such as ferric sulphate, to sewage to reduce phosphate levels at the beginning of any processing.

Despite reduced levels of phosphate at the earliest stage possible, there are concerns that the cost of these chemicals will rise in the future, and they can also lead to an increase in iron levels, which itself may need to be addressed, making it less viable as a long-term option.

Another option is sand filtration; while still relying on the addition of chemicals to waste, vertical sand filters can easily remove the phosphates.

Again, this comes with significant time and cost restraints for the housing sector, while they aim to improve time and cost efficiencies as budgets continue to shrink.

More than ever, the people of Wales need high-quality, safe and affordable homes. If we are going to address the Welsh housing crisis, we need to build more social homes across the whole country.

Laura Courtney

Head of Policy and External Affairs CHC

The Clock is Ticking: Fix Fire Safety Defects or Face Ban

With the clock ticking on developers to sign new cladding remediation contracts or face being frozen out of the market, Michael Gove has been piling on the pressure for developers to sign up to a new agreement.

Under new plans to hold developers to account for cladding remediation, Levelling up secretary Michael Gove recently wrote to all developers operating in the UK to express that the deadline to pledge is looming.

The latest deadline of 13 March highlights the government's concern that developers will leave defective cladding on buildings across the UK without intervention.

Developers have until 13 March to respond to plans

With a firm stance on who is responsible for paying for the repairs, the UK Government have stated that developers must fund the work, with previous concerns that leaseholders would have to front the costs.

Since July 2022, developers and the DLUHC have been locked in heavy discussions and negotiations over the contract terms they must sign.

Naturally, having multiple housing secretaries within this time frame has proved difficult, with Michael Gove’s predecessor Greg Clark proposing a contract to replace the remediation pledge development.

In the most recent update, the 49 developers that have already signed the pledge will see that pledge turn into a legally binding undertaking and see all buildings more than 11 metres in height see defective cladding removed.

The total costs will amount to an eyewatering £3bn to pay for additional remediation, and so far, around £2bn has already been recovered from developers that have signed up.

Developers to return money received from Building Safety Fund

Government support has also supplemented £5.1bn through the Buildings Safety Fund for building more than 18 metres in height.

To ensure developers weren’t using this support to fund the remediation they were responsible for, part of the pledge entails returning any funds they received from the fund.

In his letter to the industry, Gove explained developers who fail to sign the pledge would be: “Blocked from commencing developments for which they have planning permission and from receiving building control approval for construction that is underway”.

This will come into force on the 13 March, immediately after the deadline to sign the contract.

Developers are concerned they will be responsible past natural life cycle

From the developers' perspective, there have been concerns regarding the wording of the contractors, with many housebuilders expressing worries that it could leave them exposed to costs beyond the ‘life-critical defects’.

The government confirmed it would set up a Responsible Actors scheme in the spring, using powers under the Building Safety Act to enable it to do this.

Gove explained that the DLUHC will: “Take steps to inform investors and customers of the risks arising from continuing their commercial relationships with the offending companies. The government will also review its commercial relationships

and frameworks once it is clear who has or has not signed the contract.”

In response to this, the HBF acknowledged the crucial role they have in fixing the issues but expressed concerns that: “Government now needs to deliver on its commitment to get contributions from the numerous other parties involved in this crisis, including foreign builders and providers of the cladding at the heart of this crisis and not to repeatedly take the easy option to target UK companies.”

It warned: “In the current economic climate, repeatedly targeting UK businesses will cut housing supply, damage investment, and threaten hundreds of thousands of jobs.”

From a leaseholder and tenant perspective, debates around how it will be paid and when it will be implemented need to be resolved as soon as possible, as it is them directly at risk of fire hazards. While policy and legislation lag behind, the urgency required to resolve the crisis continues to grow. The Government hopes the new pledge will help ease frustrations.

Bank of England Interest Rates: Housebuilders Shares Improve

With the Bank of England recently announcing that the UK’s recession will be shallower than previously expected, housebuilder shares rose dramatically in reaction to the welcomed news.

Persimmon’s share price was particularly noticeable, with the share price rising nearly 8% in one day in early February 2023. The positive assessment from the Bank of England meant that the interest base rate changed by half a percentage point to 4%, lower than previously expected.

Other housebuilders’ shares also increased, with other listed builders rising up to 6% by the end of trading. For example, by close of trading, Taylor Wimpey’s shares were up over 5.5%, Bellway’s by nearly four per cent and Berkley Group’s by over 4.5%.

Shares continued to grow before peaking just after midday when the Bank of England made the announcement. The change in outlook for the housing sector comes as the bank came forward with a markedly more positive outlook for the economy and predicted that inflation had probably peaked in the UK.

Similar projections have been seen globally, suggesting any forthcoming recessions will be shallower than expected, despite inflation remaining critically high.

The inflation rate was 9.2% in the 12 months to December 2022, down from 9.3% in November. Within the policy summary released after the announcement, it was stated: “Wholesale gas prices have fallen recently, and global supply chain disruption appears to have eased amid a slowing in global demand.

Many central banks have continued to tighten monetary policy, although market pricing indicates reductions in policy rates further ahead.”

Bank of England

Speculation has arisen around whether or not interest rates have peaked, as the first split decisions over whether to raise rates now occurred. However, other commentators have expected interest rates to rise over 4.5% by mid-2023 before starting to fall by 2024.

Jonathan Moyes, head of investment research at the Wealth Club, said: “We can understand why two committee members were calling for the Bank to pause. Previous rate rises are already having an impact on the real economy, most notably through lower mortgage approvals, and inflation looks to have turned a corner and is expected to fall sharply to just 1% by 2025.”

“This was a much more optimistic tone from the Bank. Interest rate rises are expected to peak by mid-2023 at 4.5% before easing back, inflation (CPI) is expected to fall to just 1.0% in 2025, and GDP growth has been upgraded significantly from its November forecast.”

While interest rates and inflation remains critically high, there is a glimmer of hope that the housing sector is through the worst of the spike, despite concerns still dominating the sphere.

AnnualCPI inflation was expected to fall to around 4% towards the end of this year, alongside a much shallower projected decline in output than in the November report forecast.

UKGBC's Net Zero Carbon Buildings and Infrastructure Explainer Guide

Knowing where to begin on the net zero journey can be a daunting task, with many authorities needing to focus on multiple sectors at the same time. To reduce the fear around taking the first step towards net zero, UKGBC recently released a Bitesize Learning Guide. These guides are a growing suite of introductory-level sustainability resources designed to build pan-industry knowledge and confidence on key sustainability topics. The pan-industry focus is an essential aspect of meeting net zero needs and decompressing the challenges to share best practices.

The UKGBC stated: “To empower all corners of the property and construction sectors to play their part in the net zero transition, UKGBC has developed these guides to demystify key carbon concepts and create a common language for nontechnical experts to confidently engage in sustainable building.”

Jargon-free language is the key to getting people on the net zero journey

Specifically written with clear, succinct and jargon-free language, the guides aim to kick-start sustainability learning in non-specialist teams. The first set of Explainer Guides covers Net Zero Carbon Buildings and Infrastructure, Scope 1, 2 & 3 Emissions, Operational & Embodied Carbon, Whole Life Carbon, Carbon Pricing and Renewable Energy.

Elfrida Hamilton-Russell, Director of Learning and Leadership at UKGBC, said: “At UKGBC, we understand that the climate and carbon agenda can seem complex. Whilst we have seen

sustainability education grow in terms of interest, there are many people working in the Built Environment who seek support in getting started and require resources designed for those less well-versed in sustainability and carbon-related topics.”

With the UK’s ambitious 2050 net zero targets, it is vitally important that frameworks such as this are implemented to incentivise people to make the first leap. While policy and early funding come from the central government, it is ultimately in the hands of developers and housebuilders to implement better practices.

Information should be accessible to all

Accessible content is at the heart of giving the information needed to meet climate targets, especially in the built environment, which is responsible for 25% of the UK’s direct emissions.

The first of the explainer guides broke down key carbon concepts outlining how it is defined, their importance in tackling the climate crisis, how it relates to the built environment, and relevant resources to consolidate knowledge.

To support widescale awareness raising, we have developed Bitesize Learning Guides – a growing suite of free and accessible resources that can act as an entry point to sustainability education for all.

Elfrida Hamilton-Russell Director of Learning and Leadership UKGBC

Defining net zero carbon for the construction industry is a complex topic, so it’s useful to get an overall understanding of the term net zero carbon. The report explained that it could be defined as: “The total greenhouse gas (GHG) emissions would be equal to or less than the emissions the removed from the environment. This can be achieved by a combination of emission reduction and emission removal’ (ONS).”

Maximise emission reduction first

Within net zero, the approach is always to maximise emissions reduction first before offsetting the remainder. To apply this definition to built assets, UKGBC has worked to provide greater clarity by building industry consensus on a high-level definition titled Net Zero Carbon Buildings: A Framework Definition.

The framework also focuses on two further concepts of net zero buildings that can be readily measured and mitigated today – Net Zero Carbon Construction and Net Zero Carbon Operational Energy.

Net Zero Carbon - Construction was described as when: “The amount of carbon emissions associated with a building’s product and construction stages up to practical completion is zero or negative.”

Following on, Net Zero Carbon - Operational Energy was explained as: “When the amount of carbon emissions associated with the building’s operational energy on an annual basis is zero or negative.’

Through their website, they explained: “UKGBC’s Net Zero Whole Life Carbon Roadmap for the Built Environment illustrates that the UK Built Environment is currently responsible for 25% of total UK greenhouse gas emissions. If surface transport (vehicle emissions) is included within the scope of the built environment, the total share of UK emissions increases to 42%."

To meet this challenge, the World Green Building Council launched the global Advancing Net Zero campaign, which calls on businesses, organisations, cities, states and regions to ensure that all new buildings must be net zero operational carbon by 2030, with a 40% reduction in embodied carbon, and that all buildings (including existing) are net zero in both embodied and operational carbon by 2050. UKGBC also have a corresponding Advancing Net Zero campaign to further this work in the UK.

Top Ten Ways

AI can Improve Your CyberSecurity

The buzz around ChatGPT has dominated social media over recent months, with the AI chatbot looking to revolutionise companies' practices, but how could it directly help housing associations and Local Authorities improve their cybersecurity?

There are ten core principles for how ChatGPT, also known as the Generated Pre-trained Transformer, can improve cyber security. These methods include phishing detection, passphrase generation, malware detection, social engineering prevention, cyber incident response, and network security monitoring.

Additionally, it can be used to improve protection against Intrusion detection, vulnerability management, threat intelligence and compliance.

Phishing and cyber attacks can be reduced dramatically

Firstly, ChatGPT can be used to detect phishing attempts by analysing the language used in emails or other messages. It can look for patterns of language that are commonly used in phishing scams, such as urgent language or requests for personal information.

Secondly, ChatGPT can analyse the language used in emails and other internal and external messaging. By looking for patterns and language commonly used

within typical phishing scams, it could reduce the levels of phishing attacks within associations.

Password breaches are a big issue in cyberattacks, with weak security being one of the biggest holes for attackers to target. ChatGPT can resolve this through its strong ability to generate strong, unique passphrases.

Malware is becoming more sophisticated as more associations and authorities look to digitalise its data and information. The AI tool can be used in a similar way that is used to detect phishing scams, analysing patterns of language such as instructions for installing malware and also social engineering attacks.

Authorities can be more proactive in detected attacks

Interestingly, ChatGPT can be used to better respond to cyber incidents and improve response times. This could save associations and authoirites thousands of pounds and minimise GDPR breaches etc. and can even be used to monitor networks for security threats, reducing the number of successful attacks.

With changing cybersecurity regulations coming from the central government, ChatGPT can play a crucial role in ensuring companies are complying with the most recent regulations by looking for patterns of language that are commonly associated with compliance violations.

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Cymru

Mercure Holland House Hotel, Cardiff

11 July 2023

KEYNOTE SPEAKER

Rt Hon Mark Drakeford MS

First Minister of Wales

Building on the initial phases of the Optimised RetroFit Programme (ORP), this one day conference will explore how a whole house, pragmatic approach to decarbonising existing homes is essential across Wales.

Setting out core objectives of the ORP, Rt Hon Mark Drakeford MS will explore the core themes of the programme, including affordable warmth decarbonisation goals and understanding the best pathway to better energy efficiency for social homes and their residents.

The day will consist of a series of keynote speeches, panel discussions and technical seminars, with an exhibition zone running throughout the day.

#HousingCymru

#HousingLeaders

housingindustryleaders.com

Covering all Angles of the Housing Industry

11 July 2023

Mercure Holland House Hotel, Cardiff

Why Housing Industry Leaders?

Setting out core objectives of the ORP, Rt Hon Mark Drakeford MS will explore the core themes of the programme, including affordable warmth decarbonisation goals and understanding the best pathway to better energy efficiency for social homes and their residents.

The day will consist of a series of keynote speeches, panel discussions and technical seminars, with an exhibition zone running throughout the day.

Join us on 11 July 2023 at Mercure Holland House Hotel, Wales, where housing leaders, experts and innovators will be discussing what is needed right now to drive meaningful change and create communities for the future.

Join the conversation #HousingLeaders