Like many others, I am horrified that the government has scaled back aspects of the Energy Company Obligation mid-programme. You can read about some of the immediate, alarming consequences of this in a report from Inside Housing here.
However, as I’ve said before, it seems to me that long-term it makes little sense to restrict the national retrofit programme to what can be funded via a charge on energy bills. In summary, this is why:
- Retrofit is about more than energy bills, it’s about health, education, social welfare and common decency. And about energy security and cutting emissions.
- Because of the state of our housing and therefore, the scale of the need, a high spend is required.
- Because of the scale and the range of the benefits, a major retrofit programme would bring tangible revenue savings to a range of bodies such as those tasked with improving economic, health, social welfare and educational outcomes, and delivering on our carbon targets.
- Paying for retrofit through energy bills is regressive, hitting the poorest proportionally hardest, even at current spending levels.
- The scale of the spending needs to expand many-fold. This would ramp up the regressiveness. In effect, every household, including the poorest, would be paying a substantial chunk of the costs for NHS, social welfare etc via their energy bills. This is not only likely to be politically untenable, it also undermines the accepted approach to progressive taxation in this country.
- The creation of a third party obligation, ‘leaving it to the market’ to decide what to deliver on the basis of a very simplified understanding of costs and benefits, cuts informed stakeholders out of the equation. It excludes them from them any meaningful say over priorities, responsiveness to changing needs, and quality of interventions.
- It also ignores the ‘beneficiary pays’ principle: health, education and welfare budgets would all benefit considerably, on the back of bill payers.
*The ECO recognises only two parameters of benefit, presumed carbon savings (calculated via RdSAP), and “affordability” again, calculated via RdSAP.