Is the new Energy Act the stick the government needs to decarbonise housing?

The topic of discussion for those seeking to decarbonise the housing sector has largely centred on collaboration, talking, listening, learning and innovating. It is well known that asset management budgets and resources cannot service both building safety requirements for their housing stock, as well as retrofitting works. In short, registered providers (RPs) do not have the wherewithal to address these significant and competing priorities concurrently. 

Typically, the issues that carry the greatest risk get priority. Post-Grenfell, building safety is at the top of every asset management agenda. The introduction of the Building Safety Act (BSA) has reinforced compliance with building regulations and introduced significantly stricter sanctions for non-compliance, including unlimited fines or up to two years imprisonment.

“It is well known that asset management budgets and resources cannot service both building safety requirements for their housing stock, as well as retrofitting works”

Therefore, if an RP does not remediate, for example, a block of flats with building safety defects, or does not remediate to the required standard, it risks substantial sanctions as well as the obvious reputational damage and attention from the Regulator of Social Housing. The BSA and associated legislation therefore acts as the stick required to encourage and enforce compliance. 

However, until now (with Part 10 of the Energy Act coming into force on 26 December) there has been no meaningful intimation, from the powers that be, that any form of sanction will be forthcoming for building owners, or any organisation, where premises do not adhere to energy performance standards (achieving a decent rating for energy performance, factoring in the composition and age of a building).  

That is about to change – potentially. 

Part 10 of the act appears to recognise the need for premises (old and new) to achieve satisfactory energy performance ratings. While Part 10 comprises a mere four provisions, it could be one of the most powerful and compelling pieces of legislation in getting people and organisations to fundamentally act on this issue, rather than continuing to talk about it or watching what others are doing. 

Doing nothing is not an option. The narrative around the risk to the planet is already loud, clear and urgent – coupled with the fact that weather conditions in the UK are becoming increasingly unpredictable (we are already 10 ‘named’ storms into this winter season 2023-24).

At this stage, we recognise that there are no ‘regulations’ in force. These will understandably take time to consider, consult on and implement. But the fact that they are envisaged gives room for optimism that change, and progress in this essential issue, as far as the built environment is concerned, is coming and there will be nowhere to hide. 

“Doing nothing is not an option. The narrative around the risk to the planet is already loud, clear and urgent”

In broad terms, the act enables an appropriate authority to be established with the power to implement regulations to: enable or require energy usage or energy efficiency of premises to be assessed and/or publicised; enable or require possible improvements in energy usage or efficiency of premises to be identified and recommended; restrict or prohibit marketing or disposal of premises on the basis of whether their energy usage / efficiency has been assessed, certified or publicised. 

In the case of non-adherance, there are risks of direct sanctions, reputational damage, funding restrictions from lenders, and planning restrictions. 

It seems change/progress is coming. The stick the decarbonisation/sustainability sector knew it probably needed is expected. One might say now is the time to ‘get ahead of the game’ (although in reality we are decades behind) and start engaging meaningfully in decarbonising premises. 

That sounds obvious, although an asset management executive will tell you that it isn’t that simple, given the challenges they face in avoiding being hit with a building safety stick. It remains a step in the right direction, but the journey is going to be long and complex. 

James Grinstead, solicitor, Devonshires