Retrofit
The Challenge
There are an estimated 235,512 fuel poor homes in the West Midlands — the highest rate of fuel poverty in any English region at 17.5%, with some areas experiencing much higher rates of over 40%.
Over half of neighbourhoods in the West Midlands are in the bottom 20% when it comes to fuel poverty, nearly three times the national average in terms of fuel poverty. The recent Energy Price Cap to address current fuel price rises provides some short-term support but means energy efficiency is critical to managing public expenditure.
Cold homes can affect or exacerbate a range of health problems including respiratory and circulatory problems and increase the risk of poor mental health. It’s estimated that 10% of excess winter deaths are directly attributable to fuel poverty, and a fifth of excess winter deaths are attributable to the coldest quarter of homes. Cold homes can also affect wider issues, such as educational performance among children and young people, as well as work absences.
Beyond this, to hit our targets within the West Midlands Net Zero Five Year Plan, we’ll need to retrofit 292,000 homes by 2026 to stay on course for net zero and over one million retrofitted homes by 2041.
The Prize
Retrofitting the region’s 1.2 million homes to net zero is estimated to require £24.4bn, but will create huge economic benefits. Improving the energy performance of the region’s housing stock through retrofit will reduce carbon emissions by 4,182 ktCO2, reduce fuel poverty and improve the physical and mental health of those that currently live in cold homes.
Crucially, it will also create skilled jobs and kickstart the investment needed to help the sector grow and innovate, as well as dramatically reduce carbon emissions and increase the UK’s energy independence.
Levelling Up Mission:
There is no government Levelling Up Mission on Net Zero or Retrofit, but we expect our retrofit programme to contribute indirectly to both the Health and Wellbeing missions, as well as Pride in Place, and assist the government in achieving its legal net zero target.
Progress So Far…
The WMCA and its partner local authorities are already ramping up retrofit activity through government funded programmes including Sustainable Warmth Competition (SWC), Local Authority Delivery (LAD) and the Social Housing Decarbonisation Fund (SHDF). We’ve also used self-funded initiatives such as WMCA’s Net Zero Neighbourhoods programme and Birmingham City Council’s whole house retrofit demonstrators. Through our SMART Hub team, we’ve invested in detailed modelling for every home in the WMCA area, which is available for all partners to use to help prioritise investment and support decision making. Our three biggest cities have also set out their desire to scale up the retrofit of their social housing stock through the Three Cities initiative.
Our Proposal
- Allocate the West Midlands fair share of theremaining to the region from the remainingHUG and SHDF streams (£1.6bn) for on-the-ground retrofit delivery;
- Increase flexibility within the eligibilitycriteria of these funds and ring-fenceproportions for innovation, engagement,and digitisation;
- Provide funding (over 3 years) to buildcapacity in LAs – retrofit officers, andhousing enforcement officers, includingsupport for 3 Cities Initiative;
- Strengthen WMCA’s role with ECOsuppliers including greater control overthe region’s fair share of ECO funding(approximately £298.3m over four years);
- Commit to a longer-term collaborationbetween BEIS and WMCA, includingdevelopment of long-term block-fundingfor retrofit to the region;
- Invest funding in a range of retrofitinnovation programmes;
- Offer funding in loan guarantees to supportthe creation of a £15m loan fund to bemade available to businesses to developretrofit services.
What We Hope to Achieve
Based on an assessment of our own housing stock retrofit needs, and an in-depth analysis of the economic benefits of retrofit, we expect our retrofit programmes can deliver:
- Directly funded retrofits in 140,000 homesover a 10-year period;
- Stimulate an additional £1bn investmentin retrofit from public and private sectorfinance;
- Support market activity to partial or wholehouse retrofit of 240,000 additional homes
- Reduce carbon emissions by 1,338 ktCO2 /year;
- Generate annual fuel bill savings of £91m;
- Support creation of around 6,000 long-term jobs (though the eventual number ofregional retrofit jobs created could be asmuch as five times greater);
- Generate £3.20 per £1 spent on retrofitthrough increased GDP (£10.8bn in total);
- Generate £1.25 in tax revenue for every£1 of government investment (£1.75bn intotal).