I am very pleased to be here to help launch the Zero Carbon Hub’s report looking at how industry and government can work together to ensure that new homes deliver the energy performance that they are supposed to.
Zero carbon homes
The timing of this report is impeccable, coming shortly after this government has announced it will introduce the necessary legislation to deliver zero carbon homes. I am sure that most of you here today will already know about the policy and will have particular views.
The government has not taken the decision to impose this requirement on the development industry lightly. We want zero carbon homes for the benefit of the environment and consumers, but we also want them to be achieved flexibly and cost effectively.
So the way this will be achieved is through a combination of demanding energy levels on the home itself, alongside a scheme called Allowable Solutions. This scheme will allow developers to make environmental contributions to bring the level of carbon emissions for their new homes to zero. This recognises it is genuinely not possible to achieve the zero carbon target in all circumstances.
I know you are waiting to hear how Allowable Solutions will work.
I am pleased to be able to announce that the amendments to the Infrastructure Bill that pave the way for the Allowable Solutions scheme are being published. Alongside this, my department is publishing the summary of responses to last year’s consultation.
There are 2 key principles of the scheme that I want to focus on. Firstly, we have decided that developer choice should be paramount. Developers will be free to decide how they use the Allowable Solutions scheme.
Developers could choose to upgrade existing housing, they could do further work on their own developments, or they could simply pay into a fund and let others take the decision about what measures to invest in.
Secondly, we have decided that there should be a national framework for Allowable Solutions, rather than ask local authorities to set up their own schemes. This will ensure greater efficiency in delivery, consistency and total coverage of the country.
Having said that, the national framework will allow local authorities to participate and local projects to be supported through Allowable Solutions.
It will be important that developers and local authorities talk to each other about local priorities and projects. In many cases these projects may be the most cost effective option under the scheme, and government wants to see as many supported as possible. This will be good for the reputation of developers, and beneficial to local areas.
I know that you will all want to scour what is being published today, and I welcome the ongoing engagement as we move towards finalising the primary and secondary legislation necessary to deliver this milestone step towards zero carbon homes.
Small site exemption
I know there is a strong interest in the proposal to exempt small sites from the full requirements to deliver zero carbon homes. The principle behind the idea recognises the particular challenges and costs faced by smaller firms. It is right that we consider how we can help.
I cannot say much more on this today, but I can assure you that we will consult shortly and listen carefully to the responses from both sides of the debate.
Design versus as built
There is no point in the government pushing for zero carbon homes if, when they are built, they do not deliver the promised levels of energy efficiency and carbon reductions.
I am very pleased that industry and the Zero Carbon Hub have recognised this issue and come together with government to work out how to ensure that homes perform.
This is a very important issue, and one that is extremely relevant as we move towards delivering zero carbon homes.
I can assure you that the government is committed to working with you all to ensure that your target for 90% of homes to meet their stated performance levels by 2020 is met.
Let me say a bit about why the issue is important.
All new homes now come with an energy certificate rating and are required to meet demanding standards. If a consumer doubts that level of performance, or thinks that standards have not been met, then you may find that they increasingly challenge what they are getting.
I have been told that there are some examples of this happening. The potential reputational risk to the development industry and government is there already.
Developers therefore need to be confident that the homes they are selling meet the stated energy efficiency ratings and requirements of the Building Regulations.
So it is crucial that government and industry continue to work together to tackle the issues, ensure consumer confidence in your products and ensure that we deliver zero carbon homes in practice.
The report published today helps ensure that steps can be taken to build that confidence. There are a number of recommendations for both industry and government.
I encourage industry to get on with the recommendations that are specifically for you. On behalf of government, I can assure you that we will consider the recommendations carefully.
In fact, we are already actively considering one of the suggestions.
I am pleased to be able to say that DCLG sees a lot of merit in the idea to move the responsibility for construction joint details from government to industry.
Currently government publishes examples of details for the benefit of smaller developers to help them ensure compliance with the Building Regulations.
In line with the approach taken to providing details for sound performance, I can see sense in the idea that industry should take the lead in providing a similar approach for energy for the benefit of smaller builders.
The benefit of this approach would be that details will be provided and updated much more quickly in line with innovations in the market place. Smaller builders will have easy access to these details if they want to use them, and product manufacturers will benefit from being able to advertise their products via the published details.
This market driven approach to construction joint details should become self-financing over time, and would be beneficial to government and industry.
I can confirm today that we have already allocated up to a quarter of a million pounds for work on updating construction joint details and that we will consider the case for now allocating that money specifically to the new industry model.
I hope you will recognise that through our actions on zero carbon homes, and our commitments to the recommendations in the report that is being launched today, that we are serious about delivering high quality, energy efficient homes in England.
There is a view out there that we have “watered down” our ambitions, or that we are merely “puppets” of the development industry. These views are outdated and blinkered.
Even before the recent announcements, this government had strengthened the energy efficiency requirements for new homes by over 30%.
Since then, the reality is that we have taken the time to listen to the various positions and consider the evidence. We have had to balance our strong environmental responsibilities against the need to ensure that the development industry, especially smaller builders, is able to actually build the houses that we need.
I am proud of the position that we find ourselves in today. We are able, for the first time, to say how we will deliver zero carbon homes and how we will focus on ensuring that those homes perform once they are built.
This is a massive achievement, and one that has been achieved via a lot of hard work from people in the audience today. I’d finally like to take the opportunity to thank you all for that hard work, and promise you that it will be matched by commitment within government to continue working to deliver on our promises.
I look forward to the continuing discussion and I am sure you will have questions which I am happy to answer.