Powering up Britain: What Does it Mean for Social Housing?

by Floyd March

During the so-called ‘green week’ held in the UK in March 2023, the government announced the ‘Powering Up Britain’ paper.

The paper comes as the government aims to bridge net zero plans and energy security after a high court ruling on strategy specificity in July 2022.

The core objectives of the government paper were to address energy, consumer, climate and economic security.

Specifically looking at the housing sector, a mixture of new and reannounced policy announcements included alternative fuel generation, alternative heat sources, insulation of homes, energy bill reduction, and green skill gaps.

Stronger policy on closing skills gap announced

As part of the announcement, the government will write a net zero and nature workforce action plan in 2024, to set a roadmap for companies to bridge the green skills gap.

This will benefit the housing sector as there will be a significantly larger, more capable workforce across the operational side of retrofit and the wider built environment.

It has been widely discussed that the workforce in the housing sector alone is short by over 200,000 people to deliver key retrofit projects.

Introducing policies from the central government could go a long way in closing this gap, but the sheer size of the skills gap will need supplementary policies and recruitment techniques.

Focussing on shorter to medium-term policy, the government reaffirmed previous commitments to a nuclear power supply in the UK, CCUS, and hydrogen production.

While this may feel like an indirect policy towards housing, it will benefit the sector as a more resilient energy market and great diversity in the portfolio of energy sources could stable bills and usage for social housing residents across the UK.

This links to the alternative heat sources in homes strategy, which will be further assessed through the Review of Electricity Market Arrangements Programme in Autumn 2023.

Heat pump installations are a long way off 600,000/per year

The DLUHC is seemingly bought into the idea that heat pumps are the way forwards, with the recent announcement of the £30m Heat Pump Investment Accelerator fund to help meet 600,000/year by the late 2020s.

Additionally, the Boiler Upgrade Scheme will be extended to 2028 to help households install more energy-efficient boilers and reduce energy bills.

It is hoped that these funding avenues will allow for heat pumps to become more readily available, and the market will be incentivised to install them at a rapid pace with £5k installation assistance.

Focusing on a fabric-first approach is something that can be overlooked, especially with the rise of technology.

Ensuring that there is funding for this approach, the Powering Up Britain paper announced the movement of ECO+ to the Great British Insulation Scheme alongside a commitment to £1bn in investment by March 2026 for fabric first measures up to 300,000 homes.

As cleaner and green products come on the market, it is important that consumers can make a switch to these products with ease to ensure they are incentivised to make the change. This was recommended by the Net Zero Review and Energy White Paper.

This will allow for the balancing in the price between the gas and electricity pricing, which will begin at the end of 2023/ beginning of 2024.

Electricity market frameworks to see sweeping reforms

Further to this, there will be sweeping reforms to the electricity market frameworks through the Review of Electricity Market Arrangements Programme Autumn 2023 to ensure consumer security.

This could reduce some of the impacts of fuel poverty across the social housing landscape through comparable tariff pricing alignments.

Less disparity between heat sources coinciding with electricity market reforms will show a greater alignment in pricing. Further consultation on these aspects is expected for the remainder of 2023, with the implementation of policies hoped to come into effect following these consultations.

There is cautious optimism surrounding these policy announcements, despite the fact that many in the sector highlighted that a lot of these policies are re-announcements and not all policies have come with new funding, but rather the use of pre-existing funding schemes ‘rebadged.’