Cesp Stakeholder Workshop Report Eeph (discursive) (final)

Community Energy Saving Programme Stakeholder Workshop Summary Report

Prepared for the Energy Efficiency Partnership for Homes November 2008

Research undertaken and report prepared by: Impetus Consulting Ltd

Energy Efficiency Partnership for Homes

Community Energy Saving Programme Stakeholder Workshop Summary Report

Introduction In September 2008, the Government announced plans to launch a new £350 million Community Energy Saving Programme (CESP) 1 . This new programme would be targeted at low income communities in around 50 - 100 areas, offering free and discounted central heating, energy efficiency measures and small scale generation projects. Funded via a new and additional obligation on energy suppliers and electricity generators, the programme would be intended to support new and existing partnerships of local councils, voluntary organisations and energy suppliers. Around 90,000 homes might benefit over the next three years. The programme was announced as part of the Government's Home Energy Saving Programme, which aims, by 2020, for every household to be able to maximise its energy savings, whilst also investing in our future low carbon energy infrastructure.

The workshop The Department of Energy and Climate Change (DECC) was due to launch a consultation on CESP towards the end of 2008. To help inform this consultation, the Energy Efficiency Partnership for Homes (EEPH) organised a workshop in conjunction with DECC, to discuss options for the efficient delivery of the programme. Around 50 stakeholders attended the event, including members of the EEPH representing Ofgem, local authorities, NGOs, organisations involved in fuel poverty alleviation, the heating, lighting, glazing and heat pump industries, the insulation (including solid wall) industry, the managed housing sector, the private rented sector, as well as representatives of energy suppliers and generators. EEPH Chair Professor John Chesshire OBE introduced the event and welcomed representatives of DECC - Colin Macleod, CESP Project Manager and Scott Ghagan, Energy Saving Project Director. Colin Macleod gave a presentation on the aims and objectives of CESP, followed by a question and answer session . This was followed by three interactive workshops, looking at the benefits and challenges of the proposed whole house/whole street approach, solutions to these challenges, and the potential added value role of partners. DECC requested that the following points not be discussed in the workshop: ‰ The total value of the programme (since this is already fixed). ‰ The legislative base (which will be the same as the Carbon Emissions Reduction Target (CERT)). ‰ The target (CO2 target already set).

Outputs Presentation The presentation from DECC clarified that the intended approach of the programme is to tackle whole houses on a street-by-street basis, with the objective of permanently reducing fuel bills and cutting carbon emissions. CESP will fund 50-100 projects, reaching around 100,000 households in total. It will be launched in spring/summer 2009. The current plan is to target resources at the lowest income householders; 2.2 million households will therefore qualify for consideration, mainly located in urban areas. The main difference between CESP and the CERT is the community angle – so that’s what DECC wanted the workshops to focus on. 1

Number 10 press release, issued 11 September 2008, Home Energy Saving Programme, http://www.number10.gov.uk/Page16807

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Community Energy Saving Programme Stakeholder Workshop Summary Report

Q&A session The question and answer session established the following:

Timeframe CESP will be a three-year programme, but it’s not yet decided whether the three years will be measured from September 08 (announcement) or spring/summer 09 (commencement).

Partners The Government would like everyone involved in the programme (Government, generators and suppliers, communities and householders) to be able to take credit for it. DECC would like to encourage local authorities to be key partners but can’t mandate this.

What will be funded? The Government is aware that income maximisation is an important part of the programme, but is expecting other partners (such as local authorities and community groups) to offer this service; it can’t be funded directly by CESP since CESP has the same legislative basis as CERT, which requires funded measures to achieve carbon savings. (EEPH urged DECC to work with the Department for Work and Pensions on this issue.) The fact that solid wall insulation has the added benefit of enhancing the appearance of a house will be taken into account.

Which types of housing will be eligible? Social housing has not been eliminated from CESP; DECC would like to hear participants’ views on whether and how it should be included.

Links with other programmes Measures funded under CESP will be ‘additional’ even if they are eligible under CERT. There is nothing to stop an overlap between CESP and CERT where this is the most cost effective approach.

Workshop 1 – Benefits and challenges of a whole house, street-by-street approach Purpose The purpose of this workshop was to brainstorm the benefits and challenges of a whole house, street-by-street approach, and to think about the issues and considerations of linking in with major existing schemes. Looking at the benefits enabled delegates to take a step back and think about why this scheme is a good idea, before coming up with a list of the challenges of taking such an approach.

Summary of outputs Benefits A whole house, street–by-street approach can encourage collective engagement by getting through to those who are otherwise hard to access. Taking a face-to-face approach means you are fully engaging with the householder. A street-by-street approach may also have the effect of encouraging some of the more wary householders to adopt new measures because they see their

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Community Energy Saving Programme Stakeholder Workshop Summary Report

neighbours using them. It may be successful in reaching those who will not self-nominate and should also catch householders who fall through the net and/or are most in need. Another benefit is that the house will, as a result, be future-proofed; installing the more expensive measures will have a lasting impact and ensure that hard to treat homes are tackled. A whole-house approach could also potentially stimulate innovation by requiring a more creative approach than the standard measures currently funded under CERT. The proposed approach will be cost effective because it maximises savings and carbon reduction. An area-based approach can also lower the cost of delivery through economies of scale and reducing the need for repeat visits. Furthermore, some of the measures that may not have been cost-effective in isolation will become so once they are incorporated with others. Behavioural change is another clear benefit of this type of approach; face-to-face contact is a proven way of changing behaviour. Furthermore, it increases the visibility of energy efficiency measures, as the communities that are treated will become exemplars for others to follow.

Linking with major schemes – issues/consideration CERT Concern was raised about how to ensure transparency between CESP and CERT; for example, which programme has been used to fund which measures. There was a plea for clarity in terms of which measures can be funded under which scheme, and the proposed system for communicating between different schemes (particularly important given that several suppliers and generators are involved). Some participants mentioned the risk of having ‘colliding’ schemes. Questions were also raised over how priority group allocations would work (with CESP effectively being entirely targeted at CERT’s priority groups). The generators present felt that they would be at a disadvantage compared to suppliers because they don’t have the experience of running CERT schemes. There was agreement that there will need to be a certain degree of flexibility of approach. Local authority schemes Participants were in general agreement that it will be vital for local authorities to be involved in CESP schemes in order to engage successfully with householders. Several participants felt that CESP could potentially link with local authority resourcing, e.g. through Home Improvement Assistance grants or adaptation loans. Several local authorities offer top up funding for Warm Front recipients (where the Warm Front grant is not sufficient to fund all the appropriate measures) – could they do something similar under CESP? CESP will additionally need to link with the Decent Homes scheme (and its equivalents; the Scottish and Welsh Housing Quality Standards). Warm Front and equivalents Participants concluded that a partnership approach would be necessary to ensure cost effective delivery of both Warm Front and CESP and to avoid householders being confused. For example, the situation of having two different teams going round promoting CESP and Warm Front should be avoided. Where possible, there should be seamless communication and a common survey for all schemes. Some participants raised the issue of timeframe: if householders in CESP areas that are eligible for Warm Front measures are to get those measures funded under the latter scheme, they may end up waiting much longer for their installation than neighbours who get the measures funded directly by CESP. Furthermore, how can occupant disturbance be minimised? The issue of Warm Front grant limits was also raised, and the question of whether CESP could be used to top up these grants. 4

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Community Energy Saving Programme Stakeholder Workshop Summary Report

Other challenges A number of other challenges were also identified within this workshop. The eight main challenges became the focus of Workshop 2, and are listed below.

Workshop 2 – Solutions to the challenges 2 Purpose The purpose of the second workshop was to explore some of the challenges identified in the first workshop in more detail. Participants were split into eight groups, with each group looking at one challenge. They were asked to list any further issues associated with that challenge as well as potential solutions.

Summary of outputs Coordination The first challenge identified was how to coordinate the programme – how to ensure efficient delivery with minimal bureaucracy, how to coordinate funding and how to organise the project team. Solutions/issues Bureaucracy Participants stressed the need to make things easy for customers to ensure the programme works. In addition, if the plan is for communities to compete to take part in the programme, there was a concern that the proposed size of community will be too big to make this work. Participants requested that there be some degree of flexibility in the way funding is provided – some asked whether local authorities could help to provide the start-up costs. The surveyor was deemed essential in terms of generating client demand – he/she must be able to correctly signpost the householder to the various sources of help available. Levering in funding For CESP to be delivered as efficiently as possible, the Government will need to set the rules so that joint funding is permissible. There was general agreement that there needs to be transparency in terms of who is funding what. There needs to be accountability of the different funding streams (Warm Front, CERT etc.) so that it is absolutely clear who will get credit for what. There is also the potential to dovetail CESP in with other programmes such as Green Neighbourhoods, Warm Zones etc. Project team Funding will need to be provided for the project team – could CESP funding be top-sliced to allow for central coordination? Some felt this coordination role should be the responsibility of the suppliers and generators. The local authority should be a key player (some felt that the local authority should be allowed to choose who the CESP provider is), and the relevant Energy Saving Trust Advice Centre must also be involved. Community consultation will also be crucial to ensure the project team in place is one that the community has confidence in. 2

Some of the workshop groups discussed challenges besides those they were tasked with; to avoid confusion, their comments have been put under the relevant workshop heading.

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Creating demand The second challenge identified was how to create the necessary demand to achieve a whole house and whole street approach. Some householders will not want to have any measures installed, even if they are free (perhaps due to the disruption that is, to some degree, inevitable). Others may want some but not all the measures required to achieve the objectives of CERT. Consideration will need to be given to ‘hard to reach’ groups and also those in the private rented sector. Solutions/issues In terms of creating customer demand, choice and flexibility for the householder will be key; the householder will need to remain in control. Surveys and installations must be offered at a time of day that suits the target audience and communication must be simple and clear. There are various means by which to engage with a community to help generate demand, such as radio shows, local events, and talking to local community groups. A trusted brand, such as the local authority, can also be very valuable in this respect. Demand can also be enhanced by offering ancillary services such as loft clearance. The street-by-street approach should be effective in reaching ‘hard to reach’ groups although some participants suggested that the scheme should focus on the low hanging fruit first (with hard to reach groups following afterwards). Participants felt that everything should be done within an individual household within a defined time period e.g. measures all fitted within seven days – the focus must be on quality, not quantity. Many local authorities have landlords’ forums that can be an effective way of engaging with the private rented sector. A few participants expressed the view that there may need to be some restrictions on a truly flexible approach, stating, for example, that ‘the customer is not always right’; there will be a need for a stick as well as a carrot. (The group did not discuss what form the stick could take). A couple felt that lack of demand really won’t be a problem – the demand does exist.

Fairness/equity The third challenge related to ensuring fairness and equity in terms of distributing CESP funds. This included how to define communities and how to avoid creating energy efficiency ghettos. There was also a concern around ensuring that rural areas get their fair share of funds. Solutions/issues A community could be identified based on geography or personal ‘links’ (there is a need for people within the community to know each other so that they can encourage take up). Property type and need could also be defining factors, as could the presence of existing local organisations that are already successfully engaging with the community (such as Transition Towns, currently active in around 100 areas). Most participants felt that rural areas should be included, and that the Government should recognise the potential of rural areas to deliver carbon savings. There was a suggestion that suppliers could be given the extra challenge of tackling rural areas (versus generators who are new to this area so should be tasked with the easier to reach groups; different rules could apply for suppliers and generators). To help ensure fairness, it was felt that the lowest income decile should be used as the main qualifying criterion, along with other measures such as hard to treat homes (off the gas network, solid wall, etc.) or average SAP ratings. Local knowledge should be used to identify which areas have already received support and which are in need of a helping hand. Energy Performance Certificates (EPCs) and the Housing Health and Safety Rating System (HHSRS) could be used as criteria to select communities. There was an acknowledgement that there will be more communities applying for funding than will get it. There will also be severely deprived communities lacking the

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infrastructure to deliver CESP. It was felt that support should go to those communities that are most in need and actually want assistance. Some participants felt that resources should be focused on areas selected as Beacon Councils in this sphere in order to take advantage of their knowledge and experience and to ensure there is a legacy. To cope with the energy efficiency ‘ghetto’ issue, areas could instead be viewed as a ‘hub’ with the intention of replicating the process into neighbouring areas. Other locations could also be encouraged to take action in the wider community to even out the process a little.

Transparency The next challenge involved ensuring transparency; assessing the programme’s impact and success (cross referencing the two different objectives); and making clear how much is spent on what. Solutions/issues The Government should define exactly what the objectives of the programme are and what the hierarchy of these is; for example should it be primarily carbon savings, then financial savings, and then cutting fuel poverty? Some participants felt that an Energy Performance Certificate survey should be conducted for each participating home. This would specify which measures are required and act as a ‘tick box’ to ensure all necessary work is completed. There will need to be a clear list of measures that can be funded under different programmes and a list of who is doing what. In terms of measuring success, this will be different for the different stakeholders: ‰ For the Government, it will be about meeting its carbon and fuel poverty targets. ‰ Suppliers and generators will be concerned with delivering their target. ‰ Community stakeholders will be motivated by improving 100,000 homes. ‰ Local authorities will have engaged householders whose life has been improved. ‰ Warm Front and CERT will see wider take up due to a more engaged audience. One participant pointed out that local government is accountable to residents; they felt that CESP should be similarly accountable.

Short timeframe Two key concerns about the relatively short timeframe of the programme were about the capacity of the industry to produce and install the required number of measures, and the need for generators to develop skills in this area very rapidly. Solutions/issues Participants generally felt that there would not be a problem in terms of manufacturing capacity (as the scope of the programme is relatively limited). However, there may be a problem with not having enough local installers available. Generators may be more likely to contract out because of the short timeframes – they may not want to invest in new company activities. 7

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A concern was expressed that three years is not long enough to encourage innovation. Participants would prefer the timeframe to be three years from commencement of the programme rather than from announcement to allow slightly longer to deliver outcomes.

Ensuring a whole house/street approach The next challenge was how to ensure a whole street approach (with no ‘cherry picking’ and no householders left out) and a whole house approach (with the need for a definition of ‘whole’ house). Solutions/issues To achieve this objective of a whole house/whole street approach, most agreed that all measures will need to be provided for free. However, the current funding will only go so far – there was a view that it would need to be doubled to provide the necessary measures to achieve a whole house approach at no cost to the householder. Participants in this group were split between those who felt the programme should be: Working to a target SAP figure, aiming to bring all properties up to a certain score (which offers the advantage of easy to calculate CO2 savings), or Using a measures approach with the home assessed on the applicability of the measures. All agreed that the measures will have to be inclusive, with no individual homes picked out. The scheme manager will also need to ensure that measures are installed throughout the property, and not focus on those that gain the greatest credit. The Energy Saving Trust advice centre (ESTAC) zones could potentially offer a way to access CESP funding (for example, limited to a number of communities per region).

Liability/accountability This concern was linked to generators’ limited liability, and how to address issues of contracting out. Solutions/issues Since CESP is a finite programme, there will be relatively high costs for the start up of schemes. Generators will not want to set up a large infrastructure to deliver the schemes, only for the programme to terminate after three years. In addition, it will be costly to administer the system for quantifying carbon and energy savings made. Participants asked whether there could be a single fund with a buy-out provision that is applicable to all generators, as well as capped liability and a provision for proportionate penalty. There will need to be designated service providers who take on liabilities for the programme.

Community heating How can community heating be included within CESP when the timescale of three years is too short for many community heating projects? The uncertainty of local authority capital is another problem in this respect. Solutions/issues The first solution would be to extend the programme. Other options would be for credits (e.g. carbon) to be counted when the money is paid out (rather than when the scheme is in operation). How the schemes are measured will be crucial to the successful delivery of this programme. It was pointed out that schemes servicing non-domestic properties (e.g. schools, hospitals and leisure centres) will also offer financial savings for householders, and the CO2 savings from these schemes should be credited. Impetus Consulting Ltd

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Participants asked whether the Treasury could recognise or agree that funding for these projects should be ring-fenced.

Workshop 3 – Added value role of partners Purpose To consider the ideal role of local authorities and community groups in CESP and how they can add value to the scheme. How can these partners help to deliver more than the physical measures?

Summary of outputs How can local authorities add value? Participants agreed that local authorities have an invaluable degree of local knowledge which will be important in delivering CESP; for example, they will be able to ensure that resources are targeted as effectively as possible. They are also generally trusted by householders and could provide an essential coordination role. They have a number of existing communication channels which can be used to promote CESP (such as newsletters). They also have experience of what works and of rolling out projects. Local authorities may also be able to offer their own resources to help with the delivery of CESP and will be able to ensure that the programme is integrated into other public services and strategies. One key potential barrier to the involvement of local authorities is the fact that they have limited resources. Their involvement will also require the buy-in of senior staff. Some participants felt that local authorities may be inclined to focus on their own stock, whereas CESP is targeted at all tenures. Other participants raised questions regarding how local authorities can share best practice with each other (it was suggested that the IDeA could be the conduit for this). Others questioned how quickly local authorities would be able to respond, given CESP’s relatively tight timeframe (some felt this would not be a problem). If CESP is organised on a competitive bidding basis, there was a concern that many authorities may be put off from applying because of a perceived low success rate versus a great deal of effort required to prepare the bid. This runs the risk of the ‘usual suspects’ being involved in CESP (i.e. those authorities that are already known for being very active in this area).

Which stakeholder community groups should be involved and what are the added benefits of their involvement? The following community groups were identified as potentially playing a valuable role in the delivery of CESP: ‰ Parish councils, which can add credibility, trust and provide in-depth local knowledge. ‰ Faith groups, which can add credibility, are generally well trusted, cut across social barriers and can create a ‘blitz’ spirit of encouraging the community to pull together. ‰ Advice centres, which can offer coordination and referrals as well as direct contact with the target audience and links to other initiatives. ‰ Residents and tenants, in particular local ‘movers and shakers’, who can be invaluable in explaining in layman’s terms to others why they should be involved. They can also be an effective conduit for complaints. ‰ The health sector, which can also play an important role, although this sector has very limited resources. It’s vital that health professionals don’t raise expectations amongst

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their patients that are then not met (e.g. with schemes failing to deliver promptly) as their relationship relies on very high levels of trust. Schools, which can be important in helping to engage with the families of pupils and can offer a venue for events. However, there may be an issue with their catchment areas not aligning with CESP boundaries. The fire and police services are another trusted group and have the benefit of being out and about within the community. Other groups could include the Women’s Institute, charities, social clubs, local media, housing associations, ‘green ambassadors’ and those involved in the Local Strategic Partnership.

Summary and conclusions Participants were generally in agreement that the proposed approach of CESP could be very beneficial in helping to take whole communities out of fuel poverty whilst also dramatically cutting carbon emissions. However, there are clearly several issues which will require further investigation in order to find the right solution. In particular, there will be a need to ensure effective and transparent coordination between CESP and the other major funding streams. A major challenge will be ensuring there is sufficient demand to achieve a whole house whole street approach; various community partners could play a key role in helping to achieve this. Ensuring that these new resources are distributed as equitably, but also as effectively, as possible will be another challenge. EEPH is grateful to have had this opportunity to engage with DECC in the design of this exciting new programme. The Partnership would very much like continued involvement in the process and would welcome the chance to convene again before the proposed consultation is complete, to allow more feedback.

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