Richard McWilliams 29 June 2020

Retrofit can provide a green stimulus to the UK’s regions

Times of crisis can often provide a clarity of thought and strength of vision necessary to pre-empt other challenges. The impact of the coronavirus has highlighted the fragility of many areas of our society – from housing and community infrastructure to health and social care. To safeguard these for future generations we must keep our eyes set on the future of the planet and its people.

When in 2008 the world was hit by a global recession, we saw similar major disruption – with huge constraints imposed on local authority resources and finances. Yet despite the looming threat of climate change, there was a step back on the sustainability agenda as we focused on economic recovery.

Now, a decade on, we cannot afford to delay again.

More than two thirds of the UK’s 408 district, county, unitary & metropolitan councils have now declared climate emergencies, but in the pressure of the pandemic there are questions around how much can be delivered within the constraints of public finance. Much has been made of the artificial lull in emissions in many cities and towns, but now we need a solution that both brings us economic recovery and takes us towards net-zero.

Buildings – both workplaces and homes – are some of the country’s biggest contributors to carbon emissions. By 2050, only 20% of UK buildings will be new, relying on the other 80% to be retrofitted to achieve the net zero goal. This puts huge pressure on local authorities, but also provides a unique opportunity to drive a green recovery – one that generates investment and return rather than simply adding more cost to strained budgets.

Time for a mindset shift

In housing in particular, retrofit as an idea is not new but good examples are few and far between when we are targeting net zero.

Traditionally, when local authorities look to increase the energy efficiency of their housing stock, works will focus on loft and wall insulation and new windows within aging buildings. These often fail to boost a home’s efficiency and these single interventions can have unintended consequences, for example causing poor ventilation, damp conditions, or drafts. They might not even save the occupier money on their energy bill.

Net zero objectives will only be met through a holistic approach to whole house retrofit. This means focusing on how to best achieve the overall outcome of a long-term reduction in carbon emissions, rather than the products or technologies themselves.

To do so, we need to re-evaluate our success criteria. Past programmes frequently relied on subsidy and organisations’ social motivations, because the costs incurred for works would not be recouped from energy bills. Instead, we need to focus less on fuel and traditional bills and create a market for ‘comfort’ – including heat and power but also the well-being of residents. Effectively, we package up the management of comfort within local authority portfolios as an investable proposition – a long-term funding mechanism with a contractual agreement to deliver comfortable homes in an energy efficient way.

Investing in the regions

This is not just a benefit for homeowners and the environment. Such a scheme, if rolled out nationwide, requires a local network of contractors and manufacturers. This creates an early-mover advantage for regional authorities looking to build their green economies through skilled, long-term jobs that deliver and maintain retrofitted buildings.

While for many authorities this may start with homes, the opportunity for complementary programmes in public sector and private estates – from hospitals, to schools, to office buildings – is huge. We predict that retrofit in this model has the capacity to be a £400-600bn domestic market, with the capacity also to export our knowledge and expertise.

Most importantly, this model has already been proven. In London Turner & Townsend supports The Greater London Authority’s (GLA) Retrofit Accelerator programmes, which have now been delivering investment in both homes and workplaces for over a decade. The most recent phase of the homes programme alone has seen £140m investment since 2014, while the workplaces programme has channelled £100m to upgrade over 700 buildings since 2009.

The upcoming pipeline of over 1,000 homes that will receive ‘deep whole house’ retrofit will see an average reduction in emissions of at least 60 per cent. When combined with the planned decarbonisation of the grid’s energy production up to 2050, it means that these properties will hit the net zero target in just one stage. With the Mayor’s backing, key workplace projects have also seen take up from across public organisations, from the London School of Economics and the Epsom & St Helier University Hospitals NHS Trust, to the London Borough of Barking & Dagenham.

These accelerators have earnt their name – acting as a catalyst for further expansion across the UK. As we move through the crisis of Covid-19 into the challenges of economic recession and an ongoing climate emergency, retrofit presents an opportunity for local authorities to shape their own green recovery. Those with the courage to act will find themselves rewarded.

Richard McWilliams is director at Turner & Townsend – lead delivery partner for the Mayor of London’s ‘Retrofit Accelerator Homes’ programme

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